Google TV’s uncertain future
Last year, Google surprised online video publishers with some stunning news: the company, which now generates over a quarter trillion dollars with advertising every year, effectively admitted that it isn’t very good at selling ads for its own smart TV platform, Google TV.
The issue at heart: Google has long required publishers to share a percentage of their ad inventory to be on Google TV. It’s a common industry practice. Companies like Roku or Vizio routinely sell a subset of the ad spots you see when you watch videos from third-party publishers on their smart TVs, and they pocket the money as compensation for operating their smart TV platforms.
But Google changed course on its own deals with publishers out of the blue and gave previously requested ad spots back to them, I was able to confirm with three sources with knowledge of those changes. The company is now just asking for a cut of their ad revenue — a tacit admission that these companies are better at selling their own advertising.
The policy change is just the latest example of something that has plagued Google for a long time: after growing Google TV into a major smart TV platform, Google has struggled to monetize it. The company has been spending hundreds of millions of dollars on Google TV every year, but it has yet to break even on those efforts, I’ve been told by two sources with knowledge of the issue. And with costs exploding, the company now finds itself at a crossroads, forced to decide how much it is willing to pay to stay relevant in the smart TV space.
