Google announced this week that its TV service is coming to the UK as it looks to consolidate its offerings on the small screen, but telcos need not panic just yet.
Two years after Google TV debuted in the US, two Sony-manufactured devices are available for pre-order on both sides of the Atlantic.
A “traditional” TV set is “coming soon” while a set-top box that sits between your existing HD TV and your service provider will be ready to ship in September.
From a content point of view, Google is bringing together its Chrome web browser, YouTube video and its new Play entertainment hub onto the TV platform.
In a statement, Google promised to “enhance the TV you’re used to with over 100,000 movies and TV episodes on demand, thousands of YouTube channels and apps”.
Suveer Kothari, Google TV’s head of global distribution, said the company was “at the beginning of a journey of transformation for TV”.
But Infonetics analyst Jeff Heynen told European Communications that Google TV is “a year or two away” from being a viable OTT threat.
“Clearly, Google is putting the pieces together to build a competitive video service; however, I think it will take more time,” he said.
“[The content] is still limited due to arrangements with studios and content owners, but those agreements will come."
However, that's about where the good news ends for the telco community.
“Google's experience in smart search and its growing experience in user interfaces will help make Google TV a long-term competitive threat,” said Heynen.
Ultimately, the internet giant is trying to get its slice of an burgeoning IPTV sector and, more widely, a Pay-TV market dominated by cablecos.
According to the DigiWorld Institute, the number of global Pay-TV subscribers grew 5.8 percent last year.
Within this market, IPTV saw subscriber growth of 32 percent – far outperforming satellite (12 percent) and cable (two percent).
By 2015, the research house expects IPTV to almost double its share of the Pay-TV market to 6.4 percent.
The problem for Europe is that margins are becoming ever more squeezed.
According to figures from Infonetics, the European market is currently seeing its share of global Pay-TV revenues fall by two percent as growth in Asia ramps up.
But it's not all bad news; Heynen said telco Pay-TV services are having the biggest impact in Europe.
“They are slowly rivaling cable operators, particularly in Germany, the Netherlands and France.
“They still have a ways to go to catch cable, but operators such as Deutsche Telekom, Belgacom,and KPN have done a great job of marketing advanced services and securing exclusive sports programming to entice new subscribers.”
To succeed Heynen believes there are two key levers open to telcos.
“Aggressive bundles and exclusive content remain the ticket to subscriber growth, though aggressive pricing has given way to more realistic offers that are certainly price-competitive, but also allow the operator to make some money,” he said.
Although Google TV’s initial impact may be minimal, there are also lessons that operators can learn from their rival.
“They must constantly innovate in order to keep customers happy,” said Heynen.
“They have to have multiscreen offerings, intuitive UIs and smart search across multiple devices.”
If they don’t, Google, Apple – which is also due to announce its TV offering – and the other OTT providers will, as Heynen warns, “have their lunch”.