First congratulations to SageTV for being acquired by Google!
SageTV is a company I’ve followed closely — my company, SnapStream, and SageTV were direct competitors in the “consumer DIY home theater PC” market until we shifted our focus to TV search instead.
Here are some of my opinions on this deal…
1. It’s NOT about turning Google TV into a DVR
I consider it impossible that Google acquired SageTV so they could add native DVR capabilities to Google TV (remember, Google already manages the program guide, channel changing, and even automating your native DVR). I recently read “In the Plex” by Steven Levy and it gives a glimpse of how Google thinks — and for Google, the future is all about the Internet and the cloud. For example, this is the company that declared the filesystem dead when they designed their recently released ChromeOS: “I don’t think we need files anymore” (from here in the book). And Googlers evidently joke that their product-focused co-founder and CEO, Larry Page, “went to the future and came back to tell us about it.”
DVR is too complicated to setup and it’s complicated to use (which is easier: schedule a recording and then watch it after it’s been broadcast vs. “click here to watch”???). DVR is a technology that bolts onto a broadcast medium and makes it “on-demand”…sort of. So it’s no surprise that aftermarket DVRs have NOT been a huge success (see TiVo) while online video (like Hulu, Netflix) HAS been hugely successful.
I just don’t think DVR is what Google envisions for the future of the home theater and living room entertainment.
2. Maybe it’s to accelerate cheaper Google TV hardware
One of the things SageTV had done was port the SageTV user interface to a Sigma reference design set-top box (I know their first generation set-top box — I think they called it an “extender” — was Sigma-based, but I’m not sure if the second generation set-top box was or not?).
Google TV’s 1.0 launch seems to have been commercially weak with low unit sales numbers from Logitech and Sony and, in both cases, significant price decreases (And immediate commercial success may not even have been a goal of Google TV v1– Google probably got what they wanted out of v1, which was a lot of instructive user testing and market feedback).
In any case, part of their go-to-market strategy for version 2 could be to make cheap reference designs available to anyone who wants to ship Google TV, either standalone or as a part of their device (ie on their TV, optical media player, satellite receiver, etc). And the SageTV team could accelerate this for Google TV, with their experience writing set-top box “middleware.” A healthy partnership with a lot of different hardware manufacturers (HTC, Motorola, Samsung) is a big part of how Android succeeded and continues to succeed in mobile.
3. What about Avtrex?
A company that came to mind when I read about Google acquiring SageTV was one that a lot of people probably haven’t heard of: Avtrex. I don’t know a lot about them, but I met with them once and have loosely followed them over the years. They’re an OEM-only digital home entertainment software company– that I know of, all the software they’ve written has been in Linux and has been written with various embedded hardware system platforms in mind (Broadcom, Philips, ATI/AMD, etc). I don’t know the answer, but I think it’s interesting to ask the question of why Google would have bought SageTV over, say, Avtrex? Or, who knows, maybe we’ll see Avtrex get acquired by Google too?
Update, 1:50pm, Monday June 20, 2011:
- GigaOM writer Janko Roettgers agrees with me but “bets his money” that Google’s going to integrate SageTV’s place-shifting technology into Google TV. My response from the comments there: I doubt it’s the placeshifting thing. In the same way that DVRs require hard drives, placeshifting requires hardware to transcode from the source format to the target format and bit-rate that the audio/video get streamed out in. And I think one of the things that Google will react to in Google TV 2.0 is the high cost of Google TV 1.0 devices (Logitech Revue was originally $400 and the least expensive Sony TV with Google TV is $600 today and was more at launch). And plus, if DVR is relatively difficult to use (as I argue it is), place-shifting is probably 10 times more difficult to setup and get running.
- Correction: Two commenters pointed out that DVRs have in fact been very successful (40% attach rate in the United States) — they just haven’t been successful in the after market (ie TIVO). I stand corrected, they’re both right, I really meant “aftermarket DVRs” (and I’ve updated the post to reflect this). But my argument still stands, DVR just doesn’t fit the mold of big ideas that Google goes after from what I’ve seen of the company myself and from what I’ve read/heard.
- For fun (!), here’s my parsing of the note posted on their site: “And as the media landscape continues to evolve [Ch-ch-ch-ch-changes!], we think it’s time our vision of entertainment management grows as well [by joining Google, we’re ceding our vision to Google’s larger vision]. By teaming up with Google, we believe our ideas will reach an even larger audience of users worldwide on many different products, platforms and services [We’ve been acq-hired! There’s a lot of different stuff we’ll be working on at Google, applying our expertise to Google digital home efforts]”
- One last thing… how many people do others think work at SageTV? I never got the impression that they were more than 6 or 7 people. Anyone else have any other ideas? Did they take outside investment? I’d love to hear if people have a sense of either of these things.
- Brent Evans “partially agrees” with me but says I’m missing the complete picture of SageTV’s value. I’d love to hear more!