Biz model for google tv


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These slides summarize a business model for Google TV as part of a course on business models taught by Jeff Funk

Published in: Business, Technology

Biz model for google tv

  1. 1. Business ModelKarthik Leong Kong Fee Duan Jinglong Qing JinJian
  2. 2. Outline1. Introduction : What is Google TV2. Customers / Value Proposition • Television • Applications and Games3. Strategic Alliances & Complementary Services • YouTube Channels • Google TV Ads4. Value Capture5. Strategic Control / Network Effects
  3. 3. What is Google TV• Platform with Android OS integratedwith Chrome browser to create web-enabled, interactive TV overlay on top ofexisting TV• Can switch between TV (cable andsatellite) and web• co-developed by Google, Intel, Sonyand Logitech. Sony TV• incorporated into set-top box eg.Logitech to connect to existing TV orbuilt-in directly to TV eg. Sony TV• NBC, ABC, CBS and Hulu blockedGoogle TV from accessing their content Logitech - Revue Remote Control
  4. 4. Existing TV Value Chain Basic Package Pay TV / Premium TV Subscribers Channels - A la carteMovie Studios Cable, Satellite, Telcos Accessed on TV Pay Per View (91% of US households) Accessed online (30% of US households)TV Networks Over The Top (OTT) Aggregator (Quality of Service not Guaranteed – depends on Broadband Connection)
  5. 5. New Google TV Value Chain/Network TV Contents TV Customers Google TV: Contents Convergence (Web Search) • Search both internet, TV programming and Android TV apps installed on Google TV to find showsOnline Contents
  6. 6. Value Proposition Television
  7. 7. Types of CustomersGoogle TV Device Customers• Customers who purchased Google TV from device manufacturers eg. Logitech or Sony• Search and watch internet or TV contents• Run applications and games on AndroidAdvertisers• Advertisers for Web Search on Google TV (AdWords) – in future; keep interface simple for early adopters now• Google TV Ad (New Complementary Service; AdWords platform)Google TV Device Manufacturers• consoles and TV manufacturers with built-in Google TVApps and Games Developers on Google TV
  8. 8. Value Propositions Google TV Device Customers• Bundles contents from TV and web – Choose from program listing orsearch for entertainment on demand• search algorithms profile behaviour based on keywords to predictrelevant contents (Personalized Contents)• Android Applications / Games eg. Social applications for livediscussions on the program• Access to free contents online eg. YouTube or low cost onlinesubscription (eg. Netflix - $7.99 per month compared to $60 per monthfor cable / satellite subscription) on the big TV Screen
  9. 9. Value Proposition Applications & Games
  10. 10. Google TV Value Proposition (Game players)• Flash support inbuilt – Existing HTML5 and Flash games requires no change to run on Google TV (Network Externality)• Touch screen consoles for games.• Familiar platform attracts more developers • More creative games• Platform also supports API for Games with better graphics and Sound quality • D-pad More interesting social games Better living room entertainment • HD Graphics • Sound Support
  11. 11. Google TV Value Proposition (App Users)• More free apps in android compared to apple IOS.• User friendly and need of the hour apps supported – NBA scores, news feeds• Support for social networking apps like facebook and twitter• Affordable price of the device (99$) compared to tablets and smart phones Typically for early adopters who just want to try new apps.• Specialized apps -> Optimized only for google TV.
  12. 12. Google TV Value Proposition (Games & Apps Developers)• The brand name Google• Android Platform – Ease of use andfamiliarity• Google TV gaining momentum recently.• Familiarity of the development platform and availability of the development kit.• Reduced time to learn and master the technology. (Android Programming)
  13. 13. Strategic AlliancesComplementary Services
  14. 14. Strategic Alliances – Complementary Services[1] YouTube Channels (Partners with Media / Production Co.)Google TV blocked by: Major TV Networks: NBC, ABC, CBS Online Content Co. : Hulu -> Limits effectiveness of Google TV SearchGoogle partners with media / production co. -> create original programming on YouTube channels - alternative to cable TV on internet - initially 100 channels but eventually targeting millions of channels (compared to 100s for cable / satellite TV) on Web - wide variety of interests -> Infinite contents (Long Tail in TV programming)[2] Google TV Ad (Partners with Satellite / Cable / TV Service Co.)Create in-roads to TV advertising - Broker placement of advertisements on TV and online programs
  15. 15. Partnerships with Media Co. – YouTube Channels• Channels will receive programming from dozens of media / production co. and online video creators• each channel will contain hrs of programming• Channels are free for users supported by advertisers• Media / Production Co. receive as much as 55% of ad revenues after cost paid to producers
  16. 16. Partnerships with Content Aggregators – Google TV AdSteps:1. Logon to Google TV Ad Self Service Portal: Choose Network, Day/Time, Program for Ad to appear (local or national)2. Set Maximum Budget3. Highest bid will be shown (Auction Model)4. Pay by Cost Per Thousand Impressions (CPM)5. Google provide report on cable TV set top box impressions and audience tuning behaviour Network Program Day/TimeGoogle Ad Creation Marketplace - industry professionals provide script Guidance on target audience writing, editing, production, and (demographics) voice-over at affordable package cost
  17. 17. Value Proposition – Advertisers Google TV Ad• Google Analytics - guidance on audience demographics - stats of the impressions / tuning behaviour• Google Ad Creation Marketplace – caters to all budgets• Advertisers set maximum budget - transparent bidding mechanism• Only pay when advertisements are watched• For online + TV programs
  18. 18. Value Proposition – Content Aggregators Google TV Ad• Partnerships with Dish Network, DirectTV, Verizon FiOS TV, EchoStar and Astound Cable for Google TV Ads• Auction model ensures they get the most advertising dollars for their programs• monetize more programming (transparent bidding mechanism -> more bids for all programs advertising space)
  19. 19. Value Capture
  20. 20. Industry Architectures - Value Chain Content Content Content User End User Creation Packaging Distribution InterfaceTraditional Hollywood Broadcast Broadcast TV TV Viewers/ Studios Networks Stations Consumers Independent Cable Cable Producers Networks MSO’sChanges/Additions User Google TV Google TV TV Viewers/ Generated Consumers Content The Internet PC
  21. 21. Industry Architectures - Value NetworkInternet Value Network Multisided Advertisers Market Search Users (e.g., Online Store) Search Advertising - AdWords 5 3 1
  22. 22. Industry Architectures - Value NetworkInternet Value Network AdWords/AdSenseMultisided Website visitors Online Stores Market Content Providers
  23. 23. Industry Architectures - Value Network Movie/ VideoToday’s Model Makers Cable operators Content Providers (Comcast, Time Warner) (HBO, ESPN)Subscribers Advertisers(End-user) Satellite TV Broadcasters (NBC, CBS) Both TVInternet TV’s Model and Web Movie/ Video sites. Makers (Except: Content Providers NBC, Internet (HBO, ESPN) CBS, Service ABC Providers TV Broadcasters Web Sites) Internet TV (CNBC, CBS)Subscribers TV or Set‐top (Google TV) Advertisers(End-user) Manufacturers Video Service Provider (Netflix, Youtube) Cable operators (Comcast, Time Application/Game Warner) Providers
  24. 24. Money Flow within the Architecture A TV Broadcasters Internet (NBC, CBS) D Service V Providers E (AT&T, Premium Content Comcast) R Google TV/ Providers Google TV (HBO, ESPN) TSubscribers TV or Set‐top Ad I(End-user) Online Video Service Manufacturers S (Netflix, Youtube) E R Application/ Game S Cable / Satellite Developers operators (Comcast, Time Warner) Movie/ Video Producers
  25. 25. Value Capture TV Broadcasters Video Application/ TV/ Google TV/ Movie/ Video & Content ServiceGoogle TV Ad Game Set-top Producers providers Providers providers Manufactures Sale of Sale of Advertising Products Advertising Advertising Advertising products Advertising Revenue from Advertising Sale of Subscription Subscription applications Google TV Ad Commission from the sale of applications
  26. 26. Strategic Control
  27. 27. Multi-sided Platform TV/Set-top box (Sony, Logitec) Google TV ContentAdvertisers (Android OS) providers Peripherals Apps/games S/W End-users(remote control) (apps/games developers)• Control key interface standards• Create network effects• Develop complementary assets
  28. 28. Control Interface Standards TV/Set-top box • TV/Set-top box manufacturers (Sony, Logitec) – Android Open ADK (Accessory Development Kit) ADK • Apps/Games developers Google TV – Android Open API (Application (Android OS) Programming Interface) Android Ecosystem API, Chrome Web Store, Android Market – Chrome Web Store & Android Peripherals Apps/games S/W Market (apps /games(remote control) developers) • Peripherals – Remote control by Android Upgrades, Chrome Web Phones & Tablets Store, Android Market • Users End-users – OS upgrades, Chrome Web Store & Android Market
  29. 29. Create Network Effects • Partnership with Cable Co. – Cable Co. – Satellite Providers End-users Satellite – TV networks providers – OTT aggregators • Draw on pool ofApp/game TV – Advertisers (Adworddevelopers networks platform) – App/game developers OTT • Device manufacturer Advertisers aggregators – Free license for Google TV
  30. 30. Develop Complementary Assets• Complements produced by complementors – Contents, Ads, Apps/games• Complements developed within Google – data centers – servers and network – Google TV Ad for both online and TV contents (pending patent application): analytics for tracking and reporting impressions of ads – YouTube Channels: millions channels available online – Brand name & reputation
  31. 31. SummaryGoogle TV • searches contents online and on TV • Android market and Chrome Web Store – Apps and GamesComplementary Services through Strategic Alliances• Google TV Ads brokers placements of ads on online and TV programs• YouTube Channels generate millions of channels onlineValue Capture• Advertising – Google TV Search (Adwords platform) – in future• Advertising – Google TV Ad (Adwords platform)• Advertising – YouTube Channels• Revenue from Apps and GamesStrategic Control / Network Effects• Interface Standards• Network Effects – users, apps / games developers, advertisers, partners, device manufacturers• Complementary Assets
  32. 32. What Google could doValue Proposition to TV consumers:• User Interface – Explore more user friendly ways of searching apart from keyboard eg. Android voice searchStrategic Alliances:• More partnerships eg. with movies studios to make contents available on the web to coincide with DVD releaseValue Capture:• Enough advertising dollars to fund millions of YouTube Channels? -> monetize contents of minority interest directly ie. paid serviceNetwork Effects:• Merge Android and Chrome Web Store into one single platform -> more network effects from apps and games developers and advertisers
  33. 33. The End Q&A