Google chief outlines brave new world of online television

THE BATTLE for eyeballs is not really a battle at all was the message of Eric Schmidt’s MacTaggart lecture at the Mediaguardian Edinburgh International Television Festival this weekend.
The launch of the online television platform Google TV, he claimed, would “increase television viewership significantly”, growing the revenues pie for all. Most importantly, he said of television’s next wave of interactivity, “this time it’s social”.
Schmidt is the first person to give the MacTaggart lecture in its 36-year history who does not hail from the world of television or film production, and a degree of scepticism lingered in the theatre as the Google executive chairman struck a diplomatic but firm tone on issues such as copyright, advertising revenues and funding the production of content for YouTube (or, rather, not funding it).
The spectre of Google TV threatens to drain power away from the major British broadcasters, who are still working on the development of YouView, an internet television project of their own.
Google TV’s success on this side of the Atlantic is not yet assured, in any case. In the US, where it was introduced nearly a year ago, it has failed to bring on board the major American networks ABC, CBS and NBC, which have blocked their websites from the service.
Schmidt’s explanation in a post-lecture QA on Saturday was that there was “a presumption” that the service would affect revenues that flow between cable companies and distributors – economics of the US television industry that wouldn’t apply in the UK. But the deal with UK broadcasters has yet to be done, he conceded.
“We are talking to them,” Schmidt said. “The real key is that will become part of your TV over the next five years,” he added, citing the example of a children’s television show that has interactive games “layered” on top. But he didn’t wish to dwell too much on Google’s tardiness in recognising the importance of social media, preferring to talk up its new Google Plus “identity service” instead.
Online television platforms will make television “more personal, more participative, more pertinent” and actually help preserve “appointment viewing” (much in the way that Twitter does) in an era marked by greater use of on-demand services and time-shifted viewing, Schmidt claimed.
The “linear programming model” of channels whose “live” output is fixed by one-size-fits-all, in-house schedulers would probably remain as “an organising principle”, however, especially given more than 90 per cent of broadcast TV viewing in 2010 remained live. “It’s pretty clear that it’s not going to go away in our lifetimes.”
While Schmidt talked up the opportunity for independent production houses to trial content on YouTube, there was no chance that Google would risk denting its profit margins by commissioning content – if it did, it would probably just be “bad sci-fi”.
At the same time, Schmidt argued in favour of less regulation of the television advertising market – the same market from which it is on the verge of taking a major slice.
On the question of dominance, he simply dismissed the idea that Google could replicate its 85 per cent share of search advertising in television advertising as “highly improbable”.
The MacTaggart lecture, described by television executive Peter Fincham as “the closest most TV people get to going to church”, takes place annually in the country where television was invented.
Schmidt’s thesis was that – as successful as British TV format exports such as Strictly Come Dancing/Dancing with the Stars have been – a combination of an education system deficient in computer science, a marketplace too highly regulated for his liking and a cultural fear of scale businesses has undermined the UK TV industry’s ability to dominate the rest of Europe and the world.
This, he said, reflected Britain’s track record for being technologically innovative, but then losing the early lead and letting overseas companies capitalise in terms of hard cash.
In his address, Schmidt made sure to pay tribute to the strengths of each of the broadcasters whose representatives were present. “I have just one request,” he said as he praised the BBC for its iPlayer app for iPad. “Please hurry up and make an Android version.”
He also peppered his lecture with references to the actual television programmes made by the people in the room. He remained committed to Google even though Larry Page now has “the keys to the Google Tardis” and joked that though it was impressive that more people had watched vajazzle-touting reality show The Only Way is Essex online than when originally broadcast, “I must confess that I have not seen this high-quality show myself”.
He also took Alan Sugar to task for comments made on The Apprentice that engineers do not make good entrepreneurs. “Okay . . . ” said Schmidt, who has a degree in electrical engineering. “Shall we check a few facts here?”
The Google executive chairman acknowledged that some swathes of the television industry blamed the search behemoth “for the havoc wreaked on your business by the internet”.
But he wasn’t going to have much truck with open hostilities. “You ignore the internet at your peril,” he warned. “The internet is fundamental to the future of television for one simple reason: because it’s what people want.”

At the Media Guardian Edinburgh International Television Festival, Google chairman Eric Schmidt spoke On his ideology: “I speak as an American entrepreneurial capitalist who’s also a technologist, so my bias is pretty clear.” 

On satisfying current tax laws in Europe: “It’s true that we could pay more tax, but we would have to do so voluntarily.” 

On David Cameron’s idea that social media sites be “turned off” during riots: “I think it’s a mistake and I hope that’s a clear answer. It’s a mistake to look in the mirror and break the mirror.” 

On previous MacTaggart lecturers: “When he spoke here two years ago, James Murdoch described himself as the crazy relative everyone is embarrassed by. I wonder what he’d call himself now.” 

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