Why Google Is Getting Into Entertainment: Your Data

Everyone (including the New York Times!) is suggesting that Google is busy designing and testing its own-branded hardware--information that's coming directly from insiders with knowledge of the company's plans. The mysterious device "exists as a prototype and will eventually be sold as a branded item to consumers," says the Times, and as an entertainment-centric gizmo, its initial purpose will be for streaming music. This is fascinating on a number of levels, but one question about the rumor really stands out: Why?

After all, Google's early and current forays into own-brand hardware aren't exactly storming successes. Yes the Nexus line of phones sells okay now, and is pretty highly regarded--but it's often outshone and definitely outsold by other Android phones, like the other members of the Galaxy line by Samsung. Google TV in its first iteration, meanwhile, was such a disaster that manufacturing partner Logitech eventually exited the partnership with Google with overt relief. Any move by Google to expand its efforts in consumer hardware could be compared to these examples and fall into their shadow. Indeed, some headlines concerning this rumor go even further: "Google's Foray Into Hardware Will Be A Total Disaster."

But we're thinking differently. The Times article sheds some light on the matter, noting Google has to move in directions like consumer entertainment because of its need to grow, and because of the changing uses of technology in the home. It's why Apple makes its hobby project Apple TVs, for example, because it needs to have a presence in the home in a use case different to its typical computing and music devices. And Google is quite definitely moving out of its core search engine market and trying to get into new ventures like selling content (something Apple and Amazon are making great successes of). In this way, a streaming music device that connects to Google's vast servers over the Net, probably wirelessly, would be a clever way to get consumers to pay for their music via Google rather than its competitors.

The real reason is probably much more subtle, however. This is Google we're talking about--a company that goes out of its way to appear to be serving the public, all the while gathering a precious resource it uses to earn its billions: Data. Look at this other piece of hardware that's popped up recently, the Screenwise Data Collector. It's part of an opt-in data collection service that you can volunteer to be part of, for a modest monthly dollar reward, that monitors your online activity in concert with a browser plug-in. Google will use this data for its own purposes, which you can assume involves honing its algorithms, working out online consumer behavior patterns and other things like user profiling. 

Also, glance at the privacy policy for Google TV, which reminds us that Google collects "certain data. In order to continually improve our services and provide a better user experience, we always collect some information and statistics from your Google TV Product and/or the Google TV Platform. For example, we log information regarding problems setting up your system, issues with features of your system, and your use of the quick-access keys on your remote (that is, the DVR key, the guide key, the search key, etc.)." You can even opt in to share more information with Google, like your viewing history, in order that they can personalize recommendations for you...and also, of course, so that Google can better understand how its users actually use its TV boxes.

Ultimately this data from Google TV, from Google+, from Google Voice, from YouTube, from search, from Gmail and basically every other Google product turns into money for Google via advertising space. This space is sold to advertising partners on the understanding that a particular brand message is very precisely targeted at its potential market in a way that few other technologies can match, and so that every ad dollar spent is more efficiently employed.

And that is why Google wants to get into "streaming music" with hardware that the Times notes will have an eventual use that's "much wider." Music is something that the general public is now extremely disposed to think of as digital data--more so than TV, more so than other content like books (although both of these are trending that way too) and as such it's a low-hanging branch for Google. Of course plenty of hardware exists that does wireless streaming of music in the home in one way or another, via Internet radio, from users' own stored archives or even simply relaying audio from a PC to a stereo system--names like Apple and Sonos apply to these systems. But Google would be able to add its own unique spin on the idea, perhaps offering discounted access to content on the understanding that it can interweave adverts into the mix and target these to you appropriately by collecting user data. The company hasn't responded yet to our questions about the rumor.

But the conclusion looks pretty straightforward: Basically Google wants to be off your desk, out of your phone pocket, and into your home. Because that's where even more advertising dollars can be found.

[Image: Flickr user woozie2010]

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2 Comments

  • Phil Simon

    The media like to play companies off of each other. This isn't a copycat strategy; this is good business. Google is attempting to disrupt the cable industry and integrate the planks in its platform. It's called good business. Period.