Google, having predictably failed with Google TV, this month introduced its US$35 “dongle” that plugs into the digital input of a TV set. Named Chromecast, it looks and is priced like a toy, and yet has the potential to disrupt the set top box. In this report I explain why.
As if you weren’t aware, cable and satellite networks are the big target for next generation content distribution services. Computers provided a novel if limited way to view content without subscribing to satellite or cable services, and Internet-driven set top boxes such as Apple TV and Roku are a refined extension of this concept, shifting the viewing medium away from the computer to the television set while handing the user a remote control. The big bet is that the future of consumer content delivery is the open Internet, cloud delivery in today’s terms, and not proprietary cable or satellite links. The challenge to this bet is that Internet delivery gives the consumer far more opportunity to pay only for the channels they watch, versus the blanket content packages they’re forced to accept by the cable and satellite companies. Any cut in content licensing revenue is unwelcome at the studios, naturally. Therein lies the friction that cloud content delivery businesses must overcome, and which Google is poised to disrupt.
The technology behind Chromecast is clever, but cannot be attributed in whole to Google. When Apple introduced the iPhone, it eschewed Abobe’s Flash format, which up until that point was the popular method for delivering movies and catalog TV shows over the Internet to the home. Taking advantage of Apple’s success in weaning the Internet content industry away from Flash and to HTML5, Google incorporates a built-in HTML5 browser in Chromecast that connects wirelessly to an Internet router in the home.
Google adds its own innovation through use of the Chromecast HTML5 browser as a proxy for one’s smartphone or tablet. The proxy service significantly improves the experience one gets when using a technology such as Apple’s AirPlay, which mirrors the screen of one’s Mac, iPhone, or iPad on the TV set. AirPlay is quite handy in situations where one would like to show one’s photos directly on a TV set, or even mirror one’s computer screen on the TV (assuming your computer is a Mac). Quality can be constrained, however, if attempting to mirror moving content, such as Netflix videos, onto the TV set from one’s phone. The best experience for viewing streams of moving content is to send the stream directly to the TV set, and not mirror it from the personal device. Enter Chromecast, which is the first technology to do so in a manner that cleverly marries a personal device with a TV set.
With Chromecast, one initiates the viewing of content on one’s phone or tablet. The application on the device, under the direction of the user, can then instruct the Chromecast internal browser to initiate it’s own session with the HTML5 content source. This ability of Chromecast to initiate its own Internet content session brings Chromecast into the upper end of the Internet set top box category. Presumably Google has worked out matters of security when engaging in this step. Google employs HTML5 in both personal device and in the Chromecast browser in a manner that allows the user to initiate start/stop/pause/volume commands from their personal device (i.e., phone or tablet) which then controls the content viewed on the TV set. If you follow how this works, you’ll see that Chromecasting turns one’s personal device into both remote control and pseudo set top box. The ultimate goal of Chromecast is that wherever you go, your access to content also goes. All you have to have with you is your phone. Walk into a room with a Chromecast-enabled TV, and you can watch your content. This is a very powerful goal that has not been achieved by any other technology to date.
Google’s achievement may be better described in terms of the things it has eliminated. No need for complex DRM: if your phone can access the content, then you can watch it anywhere on any Chromecast-enabled TV. No need for UltraViolet, which requires the set top box to be registered to one’s Ultraviolet account. For example, students in a dormitory, using a community Chromecast-enabled TV set, can watch their favorite shows and movies with their dorm-mates by simply redirecting the playout of the content to the TV set from their phone or tablet. The person that initiates the redirection must have a Chromecast-enabled viewer on their phone or tablet, which they would have had to pay for. The higher quality possible using a Chromecast-originated stream will differentiate Chromecast content from other sources of content. Other sources of content would require the use of an Apple AirPlay-like mirroring scheme, which Chromecast can also perform, and this can penalize the quality of the picture by overloading the home router. The lower quality somewhat mimics the VHS-pirated-copy-quality scenario, where VHS copies of original content were intrinsically reduced in quality, encouraging the use of original (and purchased) versions of content.
While the technology may sound exciting, it has no value without content. Apple, which has been talking about a breakthrough in the set top box for some time (and NOT AppleTV, which is characterized by Apple as a “toy”), has refrained from introducing a product without content. Given Apple’s credentials in HTML5, it may very well have innovated its own Chromecast-like product. However, Apple appears to be lining up content deals for its technology, following its rulebook to make money on day one when a product is introduced. But perhaps that rulebook left too wide a door open for Google. Chromecast, at US$35, is priced to be in the home of every millennial, and then some. By establishing its footprint first, Google may have the upper hand in leveraging studios for content.