Google Expands Online Video Bazaar

Alternative To Apple's iTunes Store Allows Users To Set Own Prices

(CBS/AP) 
Although Google's service allows content owners more pricing freedom, it isn't necessarily as liberating for users.

While all of the videos downloaded through Apple can be transferred onto a portable player — albeit only its own iPod — for on-the-go viewing, that won't be true at Google's service.

Google has developed its own copy protection technology that so far prevents content owners from moving their video downloads to a mobile playing device. In instances where the content provider adopts Google's copy protection scheme, watching a video sold through Google will require users to be online so they can log on and view it via the company's video player. CBS and the NBA are among the content owners adopting Google's copy protections.

However, if a content owner posts unrestricted video on Google, the user could move the video onto pretty much any portable device. Charlie Rose is among those offering unprotected video.

In another distinction from iTunes, Google Video so far works only on Microsoft Corp.'s Windows-based PCs and not yet on Apple's Macintosh computers.

By relying on its own proprietary copy-protection technology, Google threatens to compound the frustration that some consumers feel when they buy songs from one online source like the iTunes store, only to discover the music can't be played on an incompatible gadget such as Creative Technologies' Zen player.

Forrester Research analyst Josh Bernoff offered a possible explanation for Google's decision: "It's arrogance."

A majority of new media players and media centers, other than Apple's and Sony's devices, are built to work with Microsoft's copy-protection technology — a setup that most entertainment companies have embraced.

"So now Google is telling Toshiba and others, 'No, you have to implement ours.' It's just crazy," Bernoff said.

Other than that potential weakness, Google appears to be laying the foundation to become a future entertainment hub along with rivals Yahoo Inc. and Microsoft's MSN, said Creative Strategies analyst Tim Bajarin.

Yahoo is widely expected to extend the range of its video offerings, although chief executive Terry Semel didn't announce any new initiative on that front during a Friday speech at CES.

"Yahoo and Google will both offer video, and I think at the end of the day, video is what the Web wants," Semel said in an interview afterward. "The opportunities are quite large for all the Internet players."

At the show, Semel unveiled a software platform that he said would allow Yahoo users to view customized content, including video, on Web-connected televisions and cell phones.

If Google's Video proves popular, it could help the company lessen its dependence on Internet advertising, which accounted for virtually all of its estimated profit of $1.5 billion last year. Some industry analysts view Google's lack of financial diversity as its Achilles' heel.

Hoping to build upon the popularity of its Internet-leading search engine, Google introduced its test version of its video service last June. Until Friday, it was almost exclusively a collection of home videos viewable for free through a live stream online.

Despite its limitations, Google Video saw a 58 percent increase in traffic compared to the previous month, from 1.6 million to 2.6 million unique visitors, according to Nielsen/NetRatings. That accounted for about 3 percent of Google's traffic in November.

Besides programming from CBS, the NBA and Charlie Rose, the list of other video material that will be sold through Google includes: old episodes from "I Love Lucy," "The Twilight Zone," and "The Brady Bunch;" music videos from Sony BMG; and historic video from Getty Images.