Google's Brilliant Move: How Chromecast Will Change TV (and YouTube)

Last week, Google made a surprise announcement introducing Chromecast, its latest attempt to conquer your living room. Chromecast is a tiny dongle (retailing for just $35) that lets you wirelessly stream video to any TV with an HDMI input.
Having learned from its multiple failed attempts at establishing a foothold in digital TV, Google radically changed its approach this time around. As a result, Chromecast is much more than just another “geeky” gadget. Instead of pushing a powerful, and complicated set top box (like the old Google TV), they kept it simple — and that’s why this is a game changer for digital TV.
Google’s Chromecast is brilliant in three ways:
It turns connecting your TV to the Internet from an investment into an impulse buy. There are of course already plenty of ways to watch online video on your TV, but most — like Apple TV or Roku — cost around $100. That’s not a huge amount of money, but many consumers will give it some thought.
On the other hand, Chromecast is affordable: For the price of two movie tickets and popcorn you can stream YouTube, Netflix and Pandora to your big screen TV. What’s not to like? Removing all obstacles to get people to connect their TVs is a huge step forward for the industry. At this price point, consumers can afford to buy Chromecasts for every TV in their home.
It leverages existing apps on the most popular platforms — no need to learn anything new, no need to develop a new platform. If you own an iOS, Android device, Mac or PC — that describes about 99.5% of Internet users, then you can stream video to Chromecast immediately, from apps you already have. Most people now use mobile devices or laptops while watching TV anyway, so there’s no need to change your habits.
Developers will like this approach, too. They won’t have to develop for yet another platform, but instead can use Google’s SDK to quickly add Chromecast capabilities to their existing apps.
It’s personal, social, and perfect for YouTube. One of the fun things about Chromecast is that everyone in the same WiFi network can stream to it, and everyone can feed the same queue — from their favorites, subscriptions or just-in-time searches. You can have collaborative YouTube viewing sessions where everybody lines up their favorite clips from their phones. It’s like a jukebox for YouTube videos. That’s a fascinating new way to use a TV.
Watching YouTube videos on an Apple TV is a pretty awful experience. Additionally, a physical TV-style remote control is simply not designed to navigate large content collections very efficiently. Streaming from your iPhone to the TV using Apple’s AirPlay is nice, but it blocks your mobile device while you stream. Chromecast solves both these problems by using the power of rich UIs on connected devices and by streaming fully in the background. You can continue to do interesting things on your phone or tablet, such as sharing the videos you’re watching on social networks.
This has the potential to take YouTube on TV to an entirely new level. Needless to say, there is tons of great content on YouTube, but watching them in lean-back mode on a big screen has always been a pain. Chromecast changes this quite radically.
Bonus point: Google will soon sit on a ton of data about TV viewing habits. Targeted ads will follow.
Google’s DNA is still fundamentally that of an advertising company. It knows what you are searching for, and it can show you the right ad at the right time. YouTube creators and advertisers will like this.
But Google has struggled to apply the same principle to TV. TV viewing habits are currently difficult to measure, but Chromecast could change that. If the device goes mainstream (and its initial success suggests that it might), Google could soon know more about the TV viewing habits of individual users than anybody else. Sorry, Nielsen.