Wolk’s Week in Review: Google’s Sabrina play for the streaming device market

TV[R]EV Week In Review
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Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.

Wolk's Week In Review

1. Google’s Sabrina play

Google is allegedly rolling out a new streaming device, code-named Sabrina, that will have something its predecessor, Chromecast, did not.

A remote control.

Why it matters

Chromecast, which, as the name implies, was designed to allow viewers to cast shows from their phones and laptops to their TVs had a brief surge of popularity until users figured out that not having a remote is a major pain in the ass.

There are many reasons you might want to pause or rewind a show, and without a remote those tasks were made infinitely harder.

So, Google being Google, they seemed to simply forget about Chromecast. (This is Google’s “Magpie Syndrome” where they flit from one bright shiny object to the next and seemingly forget about the old bright shiny objects. Google Plus and YouTube Red being great examples of this.)

While Chromecast was in deep sleep, Roku and Amazon pretty much gobbled up the streaming device market, as Apple continued to believe that charging six times as much for a device with no discernable advantages over the competition was a good idea.

Fast-forward to 2020 and Google’s been getting some traction on its Android TV devices—MVPDs are using them as IPTV set top boxes—and so they want to get back into the streaming device game.

The rationale is pretty obvious—Google wants all the data that streaming device users would give them, data they can combine with their vast stores of digital data to better target advertising which would allow them to get a big piece of the $75 billion TV ad market. Solidifying an ecosystem around Google Home and the Android OS would also seem to be a secondary rationale.

Unfortunately, Google may have waited too long.

Not only have Roku and Fire TV, which jointly own somewhere between two-thirds and three-quarters of the market (data is super sketchy) proven to be very popular with consumers, their whole reason for existing is fading.

Back in the early and mid-10s, smart TV interfaces were pretty awful. If they gave users access to any OTT services, it was often just Netflix and because they couldn’t be upgraded there was no way to add new services when they came out. Not to mention the actual user experience itself was confusing and clearly designed by engineers.

And when you could eliminate all that pain for the cost of a $29 streaming stick, there wasn’t much to think about, and Roku and Amazon stole the market.

Today, however, that’s all changed, and smart TV OEMs have made interface design a priority. Samsung, VIZIO and LG all have their own FASTs, so viewers have dozens of channels to watch as soon as the TV comes out of the box, and Roku and Amazon themselves are deep into the interface game--Roku, through its deals with Chinese manufacturers, accounts for somewhere just over 25% of the smart TV market in the U.S., and Amazon is making this a priority as well, via deals with BestBuy’s Insignia and others.

Which means there won’t be a whole lot of people in the market for a new streaming device no matter how wonderful it may be.

What you need to do about it

If you’re Google, you have a few options:

Make Sabrina an adjunct to your Android boxes, so consumers will buy them for their second and third TVs.

Give Sabrina away to anyone who subscribes to YouTube TV as a way of increasing market share.

Think about partnering with an OEM to make Sabrina the TV’s operating system.

Play up your neutrality and strike deals with HBO Max, Peacock and everyone else who is still beefing with Roku and Amazon.

If you’re Roku and Amazon, no need to worry until we see what Sabrina actually looks like and if it does any tricks you can’t do. If the answer to that last question is “no”, Google may quickly forget about Sabrina too.

If you want to hear me go on about this at length, check out the podcast I did with Colin Dixon of nScreen Media this week.

2. More people stream first

New research from Hub shows that 50% of viewers make streaming services the first place they go when they turn on the TV, versus 42% who reach for the traditional set top box.

Why it matters

That’s a huge number of streamers, one that is only going to get bigger once the streaming services have more originals and those shows begin to get buzz. People are also going to keep discovering the FASTs, too, and realizing there is a world of OTT television that looks a whole lot like the cable channels they normally watch.

Only it’s free.

That’s why a brand new TV ecosystem is coming, composed mostly of the same players as the current ecosystem. In this new world, viewers will subscribe to a number of Flixes and supplement them with FASTs the same way they used cable back in the day.

Add in as well the fact that the TV networks won’t have all that many new shows this fall, plus 40 million unemployed Americans looking to cut costs, and the shift to streaming is only going to keep accelerating.

What you need to do about it

If you’re an MVPD or vMVPD, think about setting up super-skinny bundles that can be accessed via a streaming app. You can even try an aggregator play, similar to what Roku and Amazon are up to, to sell broadband plus OTT.

If you’re a smaller cable network, it might be time to cast your lot with the FASTs, setting up a linear channel that can distribute your programming to their growing audiences. Better to be one step ahead of the future than one step behind.

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