Breakout

Sponsored by

Google Chromecast: $35 Cable Industry Killer?

Breakout

While no one was paying attention Google (GOOG) showed us the business model that will change the world of media content distribution forever. The $35 Chromecast didn't kill the traditional pay cable model, but it started the death process.

The question surrounding the notion of cutting the cord on cable companies was monetization of content. It costs a bunch of money to make original content. For the last 50 odd years the money came from cable viewers in the form of monthly bills and advertisers buying space from the networks.

Related: 5 More Reasons You'll Be Cutting Your Cable TV Cord Next Year

Apple (AAPL) started eating into the old model by letting people buy content on a one-off basis through iTunes and splitting the proceeds. Netflix (NFLX) is creating original content and betting on monthly subscribers paying monthly fees (not entirely different than cable, actually).

Google has them beat. With Chromecast, customers put $35 down and watch more or less anything they want over the internet. So far that means just about anything. It's not limited the way Apple restricts AirPlay, a point Google was sure to play up when they released the Chromecast on Wednesday.

Related: Google's $35 Chromecast Puts the Internet on Your TV

Count Techonomy CEO David Kirkpatrick among the impressed. "I think Google is progressively moving forward to play a bigger role in all of our media consumption," Kirkpatrick says. "It's going to be good for their ad business too."

That's the genius of Chromecast. Google doesn't need to get paid directly by the consumer to make money. Chromecast will give Google information on everything the user watches and what device they're using to see it.

The information lets Google charge ad buyers more for better targeted ads. Google can then use that revenue uptick to pay for the content, if necessary.

What the viewer pays with is simply their personal information. If that sounds creepy to have someone monitoring what you view, you should probably stay off the internet entirely.

More from Breakout:

Google Earnings Miss: Buy or Bail?

Facebook Shares Soar After Earnings Blow Away the Bears

Amazon: Buy Shares on an Earnings Miss

View Comments