Rich Fiscus
14 Feb 2012 8:02
When Google announced their buyout of Motorola Mobility last year, it appeared to be primarily motivated by access to a handful of mobile phone patents. Even as the two biggest regulatory hurdles are cleared, there is growing evidence which suggests video technology was their primary goal all along.
It's no secret that Google wants to be in your living room. Since 2010 they have made a number of moves in that direction, some more obvious than others. In January of 2010 YouTube started experimenting with movie rentals. By late April the program had been expanded twice. It was still small and focused on independent movies, but clearly past the experimental stage.
At the same time Google was working out a deal to buy On2, whose VP6 video compression was used in Adobe's Flash Video format. Google's primary goal was developing On2's VP8 standard into an open source, and more importantly royalty free, alternative to H.264 (MPEG-4 AVC).
At the time it seemed like a questionable move. H.264 had already been established as the new defacto standard for web video. Google, however, continued promoting VP8 through development of the WebM (Matroska-based) container format to combine it with royalty free Vorbis audio.
Their biggest move that year was a full frontal assault on broadcast, cable, and satellite television with the introduction of Google TV. Ultimately Google TV went from big deal to bid disappointment. By year's end, all the major US broadcast networks were blocking Google TV users' access to free video streams. More than a year later, consumer interest is still almost non-existent.
In retrospect, it seems like that failure led to a new strategy of cooperation, rather than confrontation, with the entertainment industry. It began with an attempt to repair their strained relationship with the major record labels and establish partnerships for Google Music, which opened to the public in November.
In May they took another step with a massive deal to expand YouTube rentals with 3,000 major studio titles. While getting into VOD without a subscription offering was hardly innovative or lucrative, it sent a clear message they wanted to work with content providers, instead of against them.
For a company with Google's reputation of competing on their own terms, it was fairly remarkable. That change in attitude may also be the key to finally conquering the living room. While Internet-based TV seems inevitable, technology is only part of the equation. What's missing is a product which combines the control demanded by legacy content gatekeepers with a non-threatening cloud service like Google Music. It's virtually the same path Apple took to create the iTunes Store.
The purchase of Motorola Mobility effectively gives Google a base to build that platform from. Even better, it's already in millions of US homes. Along with Cisco, Motorola Mobility makes the set-top boxes used by nearly every US cable television subscriber. They could create an entirely new Google branded platform which incorporates Motorola's set-top box technology
In fact, that might be the home entertainment applicance they are testing. Of course they wouldn't necessarily need to sell a Google branded set-top box to an existing cable TV provider. They could be designing them for use on the fiber optic network they are building in Kansas City, Missouri and Kansas City Kansas. A Wall Street Journal report last year already indicated they were looking to offer their own a pay TV service.
In 2010 Google's new products and acquisitions seemed confused and inept. Last year they just appeared misguided. Put them together, and they suddenly look almost everything you would need to build complete home entertainment ecosystem. Whether by chance or grand design, Google may have found the recipe for disrupting home entertainment.
If Google gets their foot in the door, you can be sure companies like Apple, Microsoft, and Amazon will find a way to finally push their way in as well. As a side effect, the US broadband market may even return to healthy competition and growth.
Of course much of this depends on China approving the Motorola deal. In theory Taiwan or Isreal could also block the deal, but China is by far the most significant hurdle remaining.