Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Google Inc (GOOG): Two Reasons Why Chromecast Could Change the Streaming Game

When Google Inc (NASDAQ:GOOG) announced its new Chromecast device yesterday, tech sites exploded with initial reviews. Wired even called it “Google’s Miracle Device.” I wouldn’t go that far just yet, but there are two reasons why the small stick could disrupt its streaming competitors.

Priced to sell

The first and probably the most obvious selling point for the Chromecast is its ridiculously low price: $35. That’s significantly lower than Apple Inc. (NASDAQ:AAPL) TV and even $15 less than Roku’s cheapest streaming box. Google Inc (NASDAQ:GOOG) chose the perfect price point for launching such a device, considering its Google TV has never taken off and Apple Inc. (NASDAQ:AAPL) TVs and Rokus already dominate the market.

Source: Google.

If Google Inc (NASDAQ:GOOG) had come in the $50 to $100 range, the device would’ve had to come with much more features, and couldn’t be just the basic Wi-Fi device-pairing system that it is. As it stands, Chromecast is a simple way to stream music, movies, and video a from a user’s PC, Android, or iOS device.

Which leads us right into the device’s second major selling point: simplicity.

The beauty of simplicity

You’d think by now tech companies would have figured out that users won’t pledge allegiance to just one company for all of their tech needs – although I’ve admittedly come close. Google Inc (NASDAQ:GOOG) understands that users are going to tap Netflix, Inc. (NASDAQ:NFLX), YouTube, and others for entertainment, and they’re going to access it all from devices using a range of operating systems.

Google Inc (NASDAQ:GOOG) has created a simple device that pairs popular streaming content sites to the TV. There’s no new interface to get used to, no additional remote to use — just pure and simple sharing from a device to the TV.

The one drawback for Chromecast is that it only taps into Netflix, Inc. (NASDAQ:NFLX), Google Music, Google Movies and YouTube right now. For Chromecast to really take off, it’ll need to quickly build up the number of apps the device works with. Potential customers that already have a way to access Netflix on their TV and don’t mind watching YouTube on their computer or mobile device may not see the value in Chromecast — even for $35.

Revenue streaming

It’s hard to speculate on how much Google will benefit from the device right now, but there are a few possibilities. First is that Google will actually make a profit off of Chromecast’s sales, even at its low price. The other potentially more lucrative avenue is through advertising on Google’s services. YouTube’s mobile ad revenue has tripled over the past six months, to $350 million. If Google can persuade customers to buy Chromecast and throw mobile content from devices to the TV, it could quickly grow that figure.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.