Google TV versus the cable guy

Attendees work on laptops during the Google I/O developers conference at the Moscone Center on May 15, 2013 in San Francisco, Calif.

Tech giants from Intel to Apple and Microsoft and Sony are pursuing a strategy to create an Internet cable service and now there’s news that Google is entering the fray.

While traditional TV sets are still dominant in the living room, more-and-more people are watching what we think of as “TV” online, says Rebecca Lieb, an analyst at the Altimeter Group.

We’re also seeing consumers either unsubscribe from cable or in the case of millennials not subscribing to it in the first place,” Lieb says.

Lieb adds that they’re still watching, but on services like Netflix, Hulu, Amazon. This shift in behavior presents a tremendous opportunity for tech companies because video advertising makes more money than traditional web ads.

But Bloomberg Industries analyst Paul Sweeney says it’ll be an uphill climb. That’s because the traditional TV business still makes tons of money and they don’t want to give it up.

The Google TVs of the world, the Intels are going to find it very, very difficult to license content from existing broadcast and cable networks,” Sweeney sats. He adds, U.S. ad sales for traditional TV generate about $60 billion dollars a year. Online video sales? $3 billion.

About the author

Queena Kim covers technology for Marketplace. She lives in the Bay Area.

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