Posted by Stephanie Startz on December 3, 2009 06:16 PM
Google vs. Apple: Round 3? Round 4?
Google continues its march towards World Wide Web domination. On Tuesday, Peter Kafka reported that the search engine has engaged TV networks in discussions to host television shows through a fee-based service on YouTube. YouTube already provides television shows on its service for free, supported by advertising.
The service is similar to Apple’s iTunes store product, where streaming video will be available to view for $1.99 per episode. Emphasis on streaming. Viewers cannot download the content from YouTube, differing drastically from services offered by Apple, Amazon and Best Buy.
Streaming vs. downloading is an inherent problem in Google’s business model. Why would a consumer choose to “rent” an episode from YouTube when they could “own” and episode from one of the many competitors?
Making matters worse, Google is thwarted from engaging in a price war by the networks, according to Kafka:
But the networks and studios, which control pricing, will want to sell the streamed shows at the same price as downloads; they fear that offering them at a different price will force them to go back and rework their existing deals.
While the on-demand marketplace is quickly becoming flooded, Apple remains the major brand offering digital TV episodes and movies for rent and download. It’s obvious that Google is moving to claim a portion of Apple’s market share, following the release of the Android operating system and the Google Phone.
But Apple operates the iTunes store for a different reason than Google. The iTunes store is a marginal revenue generator for Apple; their real money comes from computers, iPods and iPhones. Google, unless it expands further into hardware, will continue to swim in Apple’s wake.