
The following is excerpted from this case study.
On May 20th, 2010 Google Product Manager Rishi Chandra gave the world its first peek at Google’s forthcoming Android product Google TV. Washington Post reporter Rob Pagararo described the scene:
“9:27 a.m. PDT: Google TV starts with an interactive guide to TV programs that simply lets you type a search for what you want to watch. Unintentional hilarity ensues when the TV feed shows an especially unsubtle campaign ad from Republican gubernatorial candidate Meg Whitman — and then the first wireless keyboard remote doesn’t work. Ouch.
9:34 a.m. PDT: You can click on a listing for a future program to have your DVR record it when it airs. But then … in a series of cringe-inducing moments, presenter Vincent Dureau keeps having trouble with the Bluetooth and asking ‘Can we switch to the other box?’ Then Chandra — I am not making this up — asks people if they can turn off their phones to free up the Bluetooth airwaves. Ouch. To add to the awkwardness factor, the TV stream keeps showing some of the weirdest footage imaginable for daytime TV, like an MSNBC bit about Nicolas Cage’s ‘animal sex diet,’ whatever that is.”
After the ill-fated but prophetic demo, Google CEO Eric Schmidt assembled on-stage the CEOs of Intel, Sony, Logitech, Dish Network, Best Buy and Adobe to chat about their support and impressions of Google TV. Paul Ottelini of Intel had already declared the previous week that, “The revolution we’re about to go through is the biggest single change in television since it went color.” Brian Dunn of Best Buy predicted this would be the “holiday shopping season of a lifetime” and many of the other CEOs confirmed their commitment to ship Google TV products “in the Fall”.
So what happened? How did Google TV crash so badly?
Many say that Google TV failed for two reasons - it lacked access to content and it had a horrible user experience. But that is really the “what” of the failure, here’s the “why”.
1. Google did not build an eco-system for Google TV prior to its release.
Third party applications and accessories can make a new product category a success by leveraging the product in ways the original designers don’t foresee and driving down pricing through competition. Google did not create a third party Google TV App Market, or enable outside hardware vendors to develop accessories. Had they done so they could have brought at least three compelling new activities to the living room:
a. Social Gaming – Microsoft Xbox and Sony PS3 divisions were focusing at the time on their hard core gaming franchises, so Google’s would-be application partners could have had this market to themselves.
b. Social TV – along the lines of IntoNow and GetGlue. With Google TV’s tight live broadcast integration and included keyboard a “second screen” wouldn’t even have been needed.
c. Super-easy Video Chat with family and friends. Logitech did come out with that function for their Google TV Revue – but with a camera price of $150 on top of the $300 base Revue price, it was a non-starter.
2. Google didn’t seek to understand the important differences between the smartphone and living room markets.
Consumers have a higher sensitivity to bugs and user experience quirks in living room products. TVs, cable boxes and stereo receivers have always “just worked”, and any new device going into the living room must be just as easy to use. In the smartphone market, original Droid consumers were more forgiving because as long as the phone calling and texting functions worked, they could suffer the learning curve on other features in private, without it affecting their spouse or children like living room mishaps tend to.
3. Google did not address content providers’ concerns about potential lost revenue.
Movies and TV shows cost a lot of money to create and that money comes from advertising and cable subscriptions. If Google was now going to sell ads overlaid or inserted into online content, would it cannibalize existing revenue streams, as had happened in the print newspaper business? Google never forthrightly addressed this issue head on. Instead they asserted that Google TV was just a browser platform and if a PC browser could display an online TV episode for free, then a Google TV browser should be freely able to do so on an HDTV.
Compare that indifferent attitude to the way that Flingo introduced their connected TV application platform service to broadcasters and advertisers:
a. We have technology built into internet connected devices (TVs, Blu-ray players, media streamers, etc.) that can detect in real-time what a person is watching.
b. We have a suite of free app development tools that let you quickly deploy your premium content via custom, branded apps to over 10 million TVs around the world that support our service.
c. We’ll give you robust analytics on how your content performs around the world.
d. Our partners include Samsung, LG, Vizio, Fox, CBS, Showtime and MTV.
e. We’ll split the revenue 50/50 with you.
4. Google did not assemble a team of proven Connected TV and User Experience specialists.
Instead of assembling a team of connected TV experts from companies like Netflix, Roku and Hulu, Google chose most of the TV team members and leaders from existing projects such as Google Apps, “a suite of Google applications that brings together essential services to help your business”.
5. Google did not conduct a valid beta test.
Dish Network ran a 400 user beta test program for Google in late 2009, early 2010. Dish was chosen because they integrated support for Google TV directly into their STBs, allowing users to change channels and set recordings from within the Google TV user interface – rather than having to jump out to the STB’s show guide, as was necessary with all cable and DirecTV boxes. Unfortunately Dish Network had only 14% market share overall, so Google did not receive testing feedback from a valid cross-section of customers.
6. Google did not have the discipline to under-promise and over-deliver.
Instead, they promised to:
a. Ship in the “Fall”. Technically, mid-October, 2010 was in the fall, but any channel person will tell you that September 15th is shipping D-Day for the Holiday Season.
b. Have “thousands” of apps running on Google TV. Through October, 2011 there were about 30.
c. Ship an upgrade of Google TV software to all users “at the beginning of 2011”. An upgrade was released to Sony users in November, 2011 and Logitech Revue users in December.
d. Support the downloading and running of Android apps. “If you’re application doesn’t require phone-specific software, it should work [already] on Google TV.” Through September 2011, there was no way to download made-for-Google-TV apps, let alone regular Android apps. When announcing the product update on October 28, 2011, Google’s VP of Product Management stated, “of the hundreds of thousands of Android apps, there should be around 1,800 apps that will work with Google TV initially”.
e. Open source Google TV software in 2011, creating a “flurry of new products and services integrat[ing] with the Google TV movement.” As of December, 2011 Google TV has not been open sourced.
7. Google did not cancel the release of Version 1.0 and improve its product offering.
By September, 2010 things were looking bleak for Google TV. Networks were talking about blocking access to their content, beta-testers had responded to a Dish survey that the $300 price was too high, Roku had preemptively dropped their Netflix streaming players to $99 and below, and Apple announced that version 2 of their streaming device, the Apple TV, would also sell at $99. Given that without broadcast network support the Google TV would be nothing more than a $300 Netflix streaming device that required a keyboard to use, one would have expected Google to rethink its product strategy. But Google had seven major U.S. CEO’s put their personal reputations on the line back at that fateful announcement in May, 2010. How could they retreat?
Result
On August 26, 2011 Google Chairman Eric Schmidt admitted that Google had shipped a beta quality version for its product release in October, 2010 “I think it’s a beta product,” he said. “Google typically brings out beta versions, and they’re not for the faint of heart, and I think that’s what you saw. We were not able to get the product perfect before we shipped it.”
On November 10, 2011, Logitech CEO Guerrino De Luca announced it had lost over $100 Million on the Google TV powered Revue and called his company’s Christmas 2010 launch “a mistake of implementation of a gigantic nature”. De Luca told investors that the company had “brought closure to the Logitech Revue saga” by making plans to let inventory run out this quarter and that there are “no plans to introduce another box to replace Revue.”
Written by Scott D. Vouri, December 8, 2011