The launch of Google TV is, I think, exposing a hidden challenge for the company. It’s best express in this comment on a GigaOm story by user ‘lz430′:
“My jaw dropped when I saw the price. Indeed, it’s Google and I love Google and everything they’ve connected and done thus far. But as others have commented, $299 is way too much, especially coming from a company that offers 95% of it’s products for free!”
In the minds of lots of consumers, Google = Free. This will make it very difficult to break out into the paid-product market, because potential customers see Google services as something they shouldn’t have to pay a premium for.
You could see this in the expectations for the Nexus One, where a substantial number of people expected Google to subsidise a smartphone down to the $99 price point, despite this being essentially impossible if the company wanted to turn a profit (something I ranted about with much profanity in my guest appearance on Angry Mac Bastards).
Google has established a great brand, but it’s a brand based on its products being free. It will be interesting to see if it can ever make the transition into being a brand people pay for.