Eric Schmidt: Google TV Can Only Help ‘Dumb TV’

Google (NSDQ: GOOG) chairman/CEO Eric Schmidt responded to the chorus of criticism from the broadcast TV business Monday with the suggestion that what he referred to as “dumb TV” isn’t well-served by the industry’s defensive posture.

The Google TV backlash was just one issue Schmidt addressed in a Q&A at O’Reilly Media’s Web 2.0 Summit in San Francisco that touched on a broad array of subjects relevant to Google.

Schmidt characterized ongoing discussions with the TV industry as positive, and that Google was sharing data to help make the case that the broadcasters who have opted to block their programming online should reconsider. “I’m quite confident we’ll get through this one because the technology is so powerful,” he said.

At one point, Schmidt mimicked the attitude of one TV executive he said he’d encountered whose identity he didn’t divulge.

“‘Do you realize your’e taking a dumb television and making it smart?'” he said, echoing the unnamed executive. Speaking as himself, Schmidt responded, “Yes, we’re guilty of that.”

While Schmidt explained that he understood how much money was at stake for content owners and distributors, he felt they were cutting themselves off to a broader array of revenue sources by banning Google TV. “The way to get more revenue is to create more revenue sources, and the way to do that is through things like Google TV,” he said.

Schmidt argued that Google TV would not only increase the amount of programming consumers would watch, but allow viewers to more easily toggle back and forth between Web and video content. He attributed the TV industries’ concerns to the “scale” of innovation that Google TV had the potential to bring to the table.

Ironically, a number of TV executives have made the opposite argument, saying it was the fact that Google TV had yet to build up a meaningful footprint in the marketplace that kept them from assessing whether they needed to participate.

Said Schmidt, “We don’t want to repeat where revenue goes to zero,” alluding to the troubles the music industry encountered with Apple (NSDQ: AAPL). “We want to make the revenues larger.”

In an earlier portion of the Q&A, Schmidt also addressed the position paper Google jointly issued earlier this year with Verizon on the subject of network neutrality. He lamented the setbacks that have come due to the recent sweeping changes on Capitol Hill. “Unfortunately, election fever took over,” he said. “Nothing will happen until January-February, or a while longer. All we were trying to do was move the ball a little bit forward.”