GOOGLE'S MOVE into providing live video streaming through Youtube is the first real indication that the Internet giant has a plan to make serious cash from its video sharing operation.
Earlier this month, Apple CEO Steve Jobs announced the supporters of Apple TV and said that consumers don't want "amateur hour". Looking at the popularity of Youtube, it was easy to dismiss Jobs' claim as a desperate ploy, but in many ways yesterday's announcement by Google is both a threat and vindication for Jobs.
Youtube packs in the viewers, no doubt, but the challenge is turn those eyeballs into cash. To do that it seems that Google, just like Jobs, believes that it needs to look towards media professionals. While Jobs' smugness hit yet new highs, he may soon realise that Google has just thrown a spanner at his shiny Apple TV and knocked it out stone cold.
The living room might need an Apple-esque product, or maybe not, as it's too soon to tell. As we reported, Jobs' vision for the Apple TV could be the right one, since consuming content via TV has proven to be a brain-dead exercise. The problem for Jobs' is that Youtube is simpler than the Apple TV.
At this year's CES we saw televisions from Panasonic and Samsung that both had Youtube applications built in. Those firms are keen to promote what they term "Internet enabled televisions" with walled garden application stores. Not surprisingly, Youtube was one of the first to appear and, though the interface can be deemed primitive at this stage, there's no doubt that as more models and manufacturers go down this route of value added services to differentiate themselves in an increasingly jaded market, user experiences will improve.
Both Apple and Google are starting to realise that the Internet is becoming a suitable replacement for the hard drive.
In the past the focus has been on being able to store rather than stream content. Being able to play video content from a hard drive was essential as Internet connection speeds were unable to support even the lowest quality streaming video. Thanks to improvements in compression and broadband speeds, however, audio and video of acceptable quality can now be streamed in real time over the public Internet to growing segments of the content consuming population.
Clearly technology is far behind being able to stream native quality Blu-ray, however resolution isn't the biggest problem when it comes to streaming live video. Dropping of frames, known as jitter, channel switching and above all synchronisation play a far bigger role in what network engineers vaguely term "quality of experience".
This partly explains why Google has been courting US telecoms operator Verizon. Streaming video is highly susceptible to network conditions, especially latency. While pre-recorded television can be buffered prior to playback, with live television that luxury vanishes.
Actually, there's no such a thing as 'live' television, the more accurate term is 'near-live'. The fact is, there will always be some delay, whether it be from Rupert Murdoch's Sky satellites or Virgin's IP network. The important point is keeping the latency low enough so that you don't hear the neighbours celebrating a goal from a free kick that has yet to be taken according to your television. And Google's deal with Verizon could just be one of many it might find necessary in order to make live streaming over Youtube a viable prospect.
The two day trial will show us whether streaming over the public Internet is really possible. BBC's Iplayer works well with pre-recorded content but as we reported during the World Cup, it fell woefully short trying to stream live video in real time. Even tests on the best-case academic network, Janet, showed terrible performance.
Steve Jobs must be wondering whether Apple TV will ever gain the foothold it needs. He might label it as a "hobby" but in truth gaining access to the living room might be just as profitable as Itunes or any of Apple's other products. Advertisers still spend billions of pounds on television advertising, so Apple, Google or any other firm will not think twice if given the chance to supplement their income with a percentage of that cash.
In the case of Apple TV, Jobs has the right idea but simply executed it a couple of years too late. Why should consumers buy yet another box merely to access paid content, when future televisions will have the software built in to do the same?
Google has realised that while Youtube needed "amateur hour" to become popular, it needs professionally produced content to become a cash cow. Consumers have many outlets for acquiring content without paying for it, so the idea will be that by adding professional content with ease of use, those who prefer downloading episodes off Bittorrent or Usenet will reconsider. Big ticket advertisers want to be associated with programs that they can rely on being of a certain quality, in the same way that users expect a level of quality after shelling out to watch a movie.
As television manufacturers try, and fail, to drum up sales through offering 3D televisions, the real selling point of future televisions will be in the ability to harness web services such as Youtube to view television programmes. Google has perhaps given the TV manufacturers like Samsung and Panasonic the ultimate marketing tool to package their televisions as much more than 50-inch wall hangings.
Whether Google can use Youtube to encourage adoption of its Android operating system by television manufacturers is another question. Samsung has already heavily invested in its Apps, however it might not need to, given the money it can rake in from serving up advertising.
Sadly for Apple this is one area where Google isn't playing catch up, and will, in all likelihood end up having the same level of success that it enjoys on the desktop. µ