marquee-productGoogle sent media consumers into a buying frenzy Wednesday with the unveiling of its new Web-to-TV streaming gadget Chromecast, which sold out online in less than 24 hours. The $35 hardware widget allows users to wirelessly send Internet video from their smartphones, tablets, and computers to their TV screens, synchronizing playback across all devices.
Media analysts speculate Google’s new spin on content distribution may force traditional cable systems to rethink outdated pay models. Techonomy’s David Kirkpatrick appeared on Yahoo! Finance on Thursday, calling Chromecast “another major move by the Internet companies that’s going to hurt the old economy of cable systems.” While old systems require viewers to pay ongoing monthly subscriptions, Google Chromecast asks users for a one-time investment of just $35.
But what Chromecast consumers aren’t paying for with actual money, they’re paying for with their own information, including what they view and how they view it. This information enables Google to better target its ads and charge buyers more for them. So while Google may not be generating much direct profit from Chromecast sales, the company’s ad business is expected to see big gains.
Talks of boosted ad sales aside, some analysts question whether Chromecast lives up to the hype. Old cable pay systems, they point out, still control content creation. Kirkpatrick, though, believes that may change as content providers begin to consider negotiating or partnering with companies like Google. “At a certain point [they] may start to say, ‘I don’t care if it pisses off the cable systems; I’m willing to work more and more with players like Google because this is the future of how people are going to be using media,’” he said.