What’s the business case for Google’s Chromecast?

Google’s new content streaming product Chromecast is high on the tech news agenda at the moment. This cheap gadget should let you stream content from a computer running Chrome, iOS or Android device and is expected to give Google a stake in a market for streaming devices that’s currently dominated by consoles, Apple and Roku.

Under pressure

Competition between Apple and Google has reached such intensity it’s easy to characterize the new device as nothing more than an Apple TV spoiler, but that’s to limit these systems to some monochromatic duopoly.

The device represents further pressure on a television industry that’s already grappling with evolving audiences, multi-platform distribution and a drive toward internationalization of content that existing copyright and control systems were never historically built to support.

There’s over 200 billion videos watched online every month. Video accounts for the largest part of all Internet traffic, and much of this activity sees viewers stream their content of choice for view on a phone or tablet display.

Chromecast changes this; it slips into an HDMI port on the back of your television and allows you to stream content from iOS (in future), Android or Chrome-equipped computers to that screen, all in HD.

The device lets you watch things on the Web on your television. It will also run smartphone apps that use the Googlecast API. These at present only include three Android apps: Netflix, YouTube and Google Play. It’s also mandatory that your home network boasts a strong WiFi connection, as the system fetches video from the cloud.

Gen Y asks Why?

Content providers are unlikely to be utterly in love with the device. You can use it to play illegitimate content. To be fair, Google hasn’t made it easy to stream unauthorized content, but all a savvy user needs to do to play local video files — such as those downloaded via illegal sites — is simply to type the file path or drop the file into a Chrome browser window.

Chrome browser users can also access online playback services like Amazon Instant Video, Hulu, Rdio and HBO Go. As will Flickr, Facebook — anything supported in the browser should be viewable on the TV. (Though QuickTime and Silverlight files won’t work.) More on what it does here.

The simplicity of use and set-up of the device has drawn inevitable comparisons with Apple’s AirPlay. It is known that AirPlay has enabled Apple to dominate the market for streaming set-top devices, mainly through the ease with which content can be streamed to a television set, in addition to iTunes integration.

Game of thrones

Google’s move to introduce a cheaper device that’s also simple to use is a deliberate one. It means both companies are now chasing the emerging online pay TV services market. They’ve been struggling to do so for some time, but programmers have been unwilling to give up on bundles and cable firms are unwilling to sacrifice control.

Apple has it seems figured out how to develop partnerships with industry incumbents in order to extend the features available within its television product(s); Google is now attempting to offer an alternative vision in which content already available online is shifted to front and centre.

This proposition is very likely to win a lot of support (at that price). However, the one question it fails to answer is just where existing industry players can find secure their business in the event Google’s model comes to dominate the space.

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