Google is used to attacking 900 pound gorillas. Just ask Steve Balmer. But its announcement this weekend, seems squarely targeted at Apple and its recent successes with the iPod.
On Saturday, Google announced that its Google Video service will be incorporating an open and flexible pricing mechanism for content distributors that are interested in offering video content online. This move is markedly different from Apple’s decision to set pricing across the board.
History dictates that an open paradigm will win, especially for such a nascent industry. Apple does have a significant advantage in this case as it is far and away the leading distributor of mobile content players. Even though most iPods do not play video, look for video to take an ever increasing role in the product offerings.
As in the late 80’s, being a one-stop shop for consumers has an advantage for Apple. But it also has its disadvantages. Google, with its cash war chest and leading online position, is in a strong position to begin co-marketing with all the other mobile device manufacturers — think : Archos, Creative Zen, etc.
Moreover, Apple’s commitment to its own proprietary standards will prove to be a significant achilles heal. This is especially true as more categories of devices begin to share the same video content. Eventually, the industry will converge on DRM standards, which means that you will be able to record content on your cable box and tranfer it to your laptop, cell phone or other mobile device. I seriously doubt that Apple’s codecs will be included in any of these packages, regardless of how popular the iPod is or becomes.