The short-sighted decision is a fantasy retreat to days when the three networks completely controlled television. In so doing, the networks are not only willfully averting their eyes from the industry's obvious future, but also damaging their own standing in an increasingly competitive media landscape and undermining their own Internet efforts. (Disclosure: CBS is the parent corporation of BNET.)
According to the WSJ report by Sam Schechner and Amir Efrati, this has been building since summer, when Google tried to convince "media companies to optimize their websites" for Google's new television service. Many signed on.
But many other companies declined to specifically optimize their websites, and some held out the possibility that they could block their content from the service, as the three networks are now doing. Some TV executives said they were worried their shows would be lost in the larger Internet. Some, including Disney and NBC, were also concerned about Google's stance on websites that offer pirated content, according to people familiar with their thinking.In short, the three networks wanted guarantees by Google that it would make the mean nasty content pirates go away and protect precious revenue. After all, the networks could potentially compete with themselves, as programs could be both on television and the Web, and they didn't need additional places that could siphon off readers.
Disney executives, for example, asked that Google filter out results from pirate sites when users search for Disney content, like "Desperate Housewives." But they were unsatisfied with Google's response, according to people familiar with the conversations.
Because they couldn't get the degree of protection they wanted, the three networks decided to block Google TV. How they could have been more shortsighted and self-defeating, I don't know. It's equivalent to deciding not to sell your goods in China just because there's so much IP piracy there.
Yes, there will be piracy. There are also people who steal cable service. Should the networks turn their backs on cable distribution in retaliation? People make illegal copies of DVDs. Should the networks get out of the business of selling copies of movies and television programs?
The networks have created two major problems for themselves. They assume that by blocking Google TV, people won't go to Web sites to see programs. What they've assured, however, is that people who want to see television on the Web, to work with their schedules, will have to go to pirate sites.
Furthermore, by blocking their content, CBS, NBC, and ABC effectively promote their competitors. On the Web, that means virtually any form of entertainment that can command someone's time. That's a pretty big set of competitors to help.
Google has the chance to reach many consumers, especially in partnership with companies like Sony (SNE). What are the networks going to do, write off each one of those who might go to the Web? Will ABC, CBS, and NBC then do the same with Apple (AAPL) TV? How about the tens of millions consumers who will connect their television sets to the Internet?
I understand the desire to protect content, which represents the curious cross between product and service that is the fiscal lifeblood of any of these companies. But the world moves where it will, no matter how inconvenient that may be to businesses or individuals. To try and stem that tide is like sticking your finger in a New Orleans levee during Hurricane Katrina. Regardless of how successful you think you've been, the floods will come.
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