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How Google’s $35 Chromecast Could Change Television As We Know It

ChromecastGoogle’s past forays into the living room haven’t exactly set the world on fire. The original Google TV was so bad it nearly sunk Logitech as a company. The Nexus Q, Google’s second attempt at a set-top box — or set-top sphere, as it were — was also panned by critics for being too expensive at $299 and too feature-poor to compete with the much less expensive Roku and Apple TV.

This time around, though, Google might have stumbled onto something big with the Chromecast, a simple HDMI dongle that works with existing smartphone and tablet apps to stream video to your HDTV. At $35, Chromecast beats all its competitors on price, and while its app support is currently limited to Netflix, YouTube, and Google Play, Google is getting more developers to add Chromecast support to their apps very quickly. If enough streaming video apps join the party, Chromecast could become the most popular stocking-stuffer this Christmas.

It could also disrupt the pay TV market in ways that no previous set-top box ever could.

One of Chromecast’s main strengths is its easy integration with existing devices. More and more younger viewers are watching video on their smartphones and tablets. Being able to press one button to shift video from a small screen to a big one is simply a natural progression for them — one that will bring many app developers on board quickly.

What happens, though, when TV Everywhere apps like WatchESPN, HBO Go, and Fox Sports Go support Chromecast alongside streaming services like Netflix, Hulu Plus, and Amazon Prime?

We know that pay TV carriers are starting to lose customers, and they’re not adding younger customers, whom Nielsen classifies as “cord-nevers.”

These are tomorrow’s householders that are in their teens (and younger) today. They are growing up in an Internet-based video culture, in which the mantra of ‘why pay for TV?’ and ‘pay TV is a rip-off,’ develop.

For this group, what they watch matters more than how they watch it, and one streaming app on their iPads is no different than the next. They don’t mind paying for apps, but they don’t want to pay for a cable bundle full of channels they don’t watch.

They are, however, willing to share. So what’s to stop them from going to their parents — or their grandparents, who might be on fixed incomes and struggling to keep up with the increases in their bills — and offering to help them pay their TV bill in exchange for the login information to their accounts, which will give them access to all those TV Everywhere apps?

Then what happens when those younger viewers all have Chromecasts, and they can watch all the ESPN and HBO programming they want not only on their tablets, but on their HDTVs and their friends’ HDTVs, too? Will cable companies track them all down and try to stop them? Are they “stealing cable” if A.) they’re helping to pay for it, and B.) they’re only using the apps on their phones and tablets? What separates one app from another, really, beyond a few artificial constructs set up by corporations?

Perhaps the scarier question for pay TV carriers is this: if Chromecast becomes wildly popular, and use of Chromecast with TV Everywhere apps begins to increase dramatically, what’s to stop the networks — who will certainly be tracking all that app usage — from striking their own deals with Google? Right now, what’s stopping them is their cozy (if someone tenuous) relationships with the carriers, and neither side has has seen nearly enough defections to risk severing ties just yet. Some networks wouldn’t buy in at all; NBC, for example, is owned by a cable company. Hockey fans seem to be pretty much stuck with cable for the rest of the decade.

On the other hand, we’ve seen Disney strike a deal with Google already, not to mention multiple deals with Netflix. They own a piece of Hulu as well. Is Disney starting to position itself for a post-cable world? Or could the carriers start creating such a world themselves by selling access to a package of TV Everywhere apps for a decent price? Would “cord-nevers” buy into a service like that, or would they reject it as just another bundle full of channels they don’t really want?

How soon we find out the answers to all these questions will depend on how quickly consumers buy into the Chromecast model. The gadget’s low price and easy integration with existing apps gives it the potential drive massive changes in the TV market as we know it, but Google might have to move more units than Roku and Apple TV combined — and to date, that’s approaching 19 million — before any of these changes become possible. Either way, Chromecast sure looks mighty disruptive, doesn’t it?

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