Google’s next streaming device will shake up the Android TV world

Google is set to introduce an Android TV streaming device in the coming months, a reimagined dongle with a new user interface that will put a bigger emphasis on individual movies and TV shows as opposed to apps, multiple sources with knowledge of the company's plans told Protocol. The company will likely extend its Nest brand to the new device, according to one of those sources.

Google's decision to produce a new streaming dongle shows its desire to more aggressively compete with Amazon and Roku in the streaming hardware space. However, building an Android TV streamer in-house is certain to complicate Google's already strained relationship with third-party consumer electronics manufacturers, and its move toward a more content-centric interface may trigger backlash from some of the biggest streaming services.

A Google spokesperson declined to comment on the company's plans, which were described by sources who requested anonymity because they weren't authorized to speak on the record. Plans for the new streaming device were first reported by 9to5Google last month.

What we know about Google's next streaming dongle

Google's upcoming streaming device has been described as looking similar to a Chromecast streaming adapter, but will function more like a Roku or Fire TV stick. Whereas a Chromecast needs a phone to launch content, the new device will come with a full-fledged TV interface and ship with its own remote control.

Users will be able to install apps for streaming services like Netflix and Disney+ from Google's Play Store, and the device will be integrated with Google Assistant for voice control. Like other Android TV devices, it will allow users to cast content, and it is expected to support Google's Stadia cloud gaming service.

Google will market the device under a distinct brand, separating it from third-party streaming devices based on Android TV, according to two sources with knowledge of the company's plans. The company is considering using its Nest brand for this purpose, according to one of these people, which would be in line with Google's recent efforts to turn Nest into the umbrella brand for its smart home and entertainment hardware efforts.

It is still unclear when Google will unveil or release the device. The company was to host its annual Google I/O developer conference in Mountain View next week, but canceled the event as a result of the pandemic. One source said Google wanted to launch the device this summer, but cautioned that those plans may be delayed due to COVID-19-related supply chain interruptions.

In March, a regulatory filing for a Google-made remote control passed the FCC, leading some to assume that the release of the streaming device was imminent. However, it appears now that the filing is not related to the product, and instead is likely part of another hardware initiative. Google is said to be working on a new iteration of its Chrome OS-based teleconferencing hardware, according to a source familiar with those efforts, making it possible that the remote is an accessory for that product.

There is also no definitive word on pricing. Industry insiders told Protocol they expect the company to price it around or below $80. Google currently sells its Chromecast streaming adapter for $35, and charges $69 for a 4K-capable Chromecast Ultra.

Chromecast's decline and Google's strained hardware relations

Google's decision to release a new streaming device can be seen as an effort to catch up with Roku and Amazon in the living room, as well as a departure from Chromecast as a standalone product. Google introduced Chromecast in 2013, betting that consumers would be content to use their phones for content discovery and playback control.

While the aggressively priced Chromecast was initially a big hit with consumers, it lost out to more full-featured competing products. Chromecast's market share declined significantly over the years, according to recent data from Parks Associates, while both Roku and Amazon added customers for their respective streaming devices.

Chart: Courtesy of Parks Associates Inc.

As Chromecast was ceding ground to competitors, Google was growing its separate Android TV platform through partnerships with consumer electronics manufacturers and cable operators. The company struck licensing deals with six of 10 smart TV manufacturers as well as 140 pay TV operators worldwide.

Some of that success is linked to Google's use of contractual agreements to prevent smart TV and phone makers from using Amazon's Fire TV operating system, as Protocol was first to report in March. The company has long required manufacturers to sign contracts that prevent them from using any forked version of Android, including the Fire TV operating system, if they want to use Google's official version of Android and have access to the company's popular apps and services.

Those policies have stirred significant unease among Google's consumer electronics partners. The company's decision to directly compete with some of these licensing partners with a new Android TV device could further complicate these relationships.

Google is looking to appease TV manufacturers in particular by helping them cut costs. The next version of Android TV will come with significantly reduced hardware requirements, making it cheaper for companies to build smart TVs running the Android TV system, according to a source familiar with those efforts. That's a big deal in a market with razor-thin margins, and a possible blow to Roku, which has long wooed manufacturers by promising to save them money with lower hardware requirements.

Some streaming services resist content-forward interfaces

Google may also get pushback from content companies. The new version of Android TV, which will first be available on Google's new device, will feature a revamped user interface meant to highlight individual movies and TV shows, as opposed to apps. Two sources told Protocol that the new interface will look similar to Amazon's Fire TV home screen, which puts a bigger emphasis on individual titles, but also heavily emphasizes Amazon shows over competing fare.

Makers of streaming devices and platforms have long embraced the idea of ditching mobile-phone-like app grids for a more content-centric experience, but have faced resistance from publishers. Netflix in particular prefers to keep its content, as well as its subscribers, within its own app, and only reluctantly embraced content-forward user interfaces that could make it easier for customers to jump from a Netflix show to that of a competitor.

These types of power struggles can sometimes get in the way of consumers' experiences. For instance, the current version of Android TV features a "Play Next" row meant to aggregate the next episodes of shows a user is watching across multiple services. However, major services such as Netflix and Disney+ don't utilize Play Next, to the dismay of many Android TV watchers.

Google is now talking to major streaming services about supporting APIs for the upcoming version of Android TV. Addressing their concerns, and ultimately getting them to support a more content-focused interface, could be key to the success of the company's new streaming hardware.