What next for the networks and Google?

Connected TVs The first generation of Google TV was essentially a browser and a search engine baked into a TV set or set-top box, along with an integrated UI that presented the search results irrespective of the source of the content. The idea was to try to establish search as a new modality for content discovery on connected TV in place of the multiple program guides, app stores and book marks that now clutter the connected TV experience.

The strategy made perfect sense from Google’s point of view because if there’s one thing Google really knows how to do it is to monetize search. Ninety-six percent of its earnings still come from search-driven ads, despite the growth of Android and other businesses.

The broadcast networks saw things differently, however. They viewed Google TV not as a user-directed content-discovery tool but as a Google-directed distribution platform for their web-based programming, which should have been licensed by Google, check out these employee benefits.

When Google balked at taking (and paying for) a license, the networks blocked the Google TV browser from accessing their online content, severely undermining the utility of Google TV to users. Google ultimately was forced into an embarrassing retreat, all-but pulling Google TV from the market.  Score one for the networks.

Google TV will soon be making a comeback, however, albeit in a very different guise. While browser-based search is still part of the mix, Google TV 2.0 (teased at this week’s I/O conference) looks a lot like an Android device, complete with the Android Market apps store.

Beyond the new look, the new version of Google TV seems to reflect a dramatic shift in strategy by the company. At the same time it was teasing the reboot of Google TV, Google unveiled some changes to the Android Market designed to make it easy to navigate and to discover content, and to address issues related to compatibility across various iterations of the Android OS. Changes include the addition of an “Editor’s Choice” panel on the home page (see below) and new ways of grouping and promoting related apps.

It’s not quite a full embrace of the Apple model of apps-based content discovery but it’s clearly a nod in that directions.

Enfolding Google TV into the Android apps ecosystem also points clearly toward an eventual three-screen strategy, incorporating Android-powered smartphones and tablets as well as the TV. Presumably, content could at some point be paused on one device and resumed on another, or purchased/rented on one device and made accessible from the others (recently acquired Widevine might play a role in securing cross-device content access).

That actually puts Google ahead of Apple, which is yet to enable the iTunes App Store on Apple TV.

Perhaps the most important change, however, was the decision to open-source the remote API for Google TV. That will give third-party developers a chance to come up with new and innovative ways to navigate around a Google TV from the couch, presumably using an Android-powered smartphone or tablet.

The 10-foot navigation problem remains one of the major (if under-appreciated) challenges facing all connected TV platforms and resulted in one of the worst features of Google TV 1.0. Using a lap-resting QWERTY keyboard and track pad is no way to control a TV; anything that involves a lot of typing is a terrible TV interface.

Here, Google lags behind competitors. Microsoft has the Kinect gesture-control system, while Apple has AirPlay for streaming video from an iPad or iPhone to the Apple TV set-top (and possibly soon other connected TVs). Google TV badly needs a new user interface and navigation system if it’s ever going to have broad appeal.

So, where does all this leave the networks ? I don’t know that they’re any better off for having killed the first version of Google TV. The new app-based approach to content discovery certainly doesn’t make Google any more likely to pay for access to the networks’ web sites; if anything, it gives Google even less incentive to pay.

The networks could, of course, continue blocking the Google TV browser, preventing Google TV viewers from accessing their web-based content. But that content is less critical to the Google TV 2.0 value proposition than was the case the first time around. Plenty of Android developers are likely to seize on Google TV to bring content and applications to the big-screen TV that ultimately will compete with traditional TV programming — the kind the broadcast networks produce.

There’s nothing stopping them from developing their own Android apps for Google TV, of course, but that would force the networks to come to Google instead of the other way around.

The Ethernet port or WiFi receiver ina  connected TVs is more than simply a new way to plug in traditional TV service. It turns the TV into a shared platform on which content and applications from multiple sources will compete for time, attention and advertising dollars.

Making your content harder to discover on that shared platform is unlikely to be a winning strategy in the long run.