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Friday, July 25, 2014

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  • Just When TVs Were Getting Smart, Chromecast Will Make Them Dumb Again

    By now, you've no doubt heard and/or read something about Google's clever new Chromecast HDMI device, a $35 media streamer introduced yesterday (Google's intro/demo video embedded below). Chromecast has a lot going for it, and could well become Google's first big hit product in the living room. If it does, there will be at least one significant consequence: instead of TVs continuing to become "Smart TVs," they are going to become dumb yet again. This would be a huge blow to TV manufacturers who have labored to convince consumers to spend extra to derive the benefits a Smart TV offers.

    I don't think Google set out to kill Smart TVs with Chromecast, but I have no doubt the team recognized some of the serious shortcomings of today's Smart TVs and sought to capitalize on them. At the top of the list of Smart TVs' limitations are lack of integration with other devices, narrow content offerings and inability to entice developers.

    Today's Smart TVs are essentially siloed from other devices in the home. As such they're ok for specific purposes - to watch a show on Netflix or something similar, but little else. The lack of integration with other devices is a huge blind spot for the big CE companies that have been pushing Smart TVs. As I wrote back in January, post CES, "For Tomorrow's TVs, User Experience is More Important Than Screen Size and Resolution," while most consumers would prioritize TV/device integration, the industry is placing more big bets on screen size and resolution (with 4KTV the latest expensive entry). I thought this blunder opened a huge window of opportunity for Apple, but it turns out Google is the first to capitalize on CE companies' myopia.

    Smart TVs have also suffered from an extremely narrow set of content choices. The big providers - Netflix, Hulu Plus, Pandora, Amazon, YouTube, MLB, etc. - are omnipresent, but little else is. Though online video content choices are exploding, Smart TVs offer virtually zero access to them. This is one of the reasons Roku, with 700+ channels, has succeeded.

    Smart TVs have struggled to expand their content offerings both because it's been hard to convince content providers beyond the very biggest ones named above to expend the resources to get on board and also because the CE companies themselves don't want to deal with the hassle of a plethora of providers. Smart TV manufacturers are not software companies and are notoriously difficult to deal with, requiring lengthy QA cycles with specs that change by model year. The vast majority of content providers have justifiably balked at developing for a platform that is both highly fragmented and still relatively small in annual volume.

    Now, enter Chromecast into this context. Chromecast hits many of the buttons today's developers and content providers look for: simplicity, cross-platform support, incremental upgrade to existing apps via a single SDK written by an actual software company and importantly, a massive potential audience. Yes, Chromecast is a new product, so "potential" is the operative word here. But Google has priced Chromecast very reasonably at $35 and by enabling YouTube and Netflix to "cast" out of the box, Google is stoking Chromecast interest with great content. It's hard to know how complicated the Google Cast SDK is, but it should be relatively simple, and assuming it is, I would anticipate droves of content providers will quickly enable casting.

    Thus the virtuous cycle for Chromecast would begin - low cost, lots of content, easy to use, and guess what - pretty soon millions and millions of devices sold. As Chromecast becomes better known and the product improves further, consumers looking for solutions to bring the world of online video (not just Netflix!) into their living rooms will think of it as a genuine option. Picture the Best Buy salesman trying to convince even semi-tech literate consumers to spend extra on a Smart TV when they've already seen Chromecast in action at a friend's/neighbor's house. It will be a tough sell to say the least. And even if they do bite, they'll be more likely to just use Chromecast anyway.

    I'll admit, it's plenty risky to get too excited about new products before they've been put through their paces. But Chromecast's demo was extremely impressive and I think Google's emphasis on integrating the TV with devices is right on the money. If Chromecast is a winner, get ready for TVs to go back to dumb-dumb land.