As exciting as Google Fiber's next-generation, gigabit per second broadband project in Kansas City is, last week's launch details underscore how out of synch its rollout plan is with the realities of typical consumer technology adoption. That's not a big surprise given Google's famously engineering-centric culture. However, it likely means that Google Fiber is going to fall well short of its objectives.
As it stands, Google Fiber is very much a classic early adopter service. It offers a discontinuous benefit of 100 times the average 10 megabit per second speed of incumbent ISPs, appealing to heavy users' appetite for the cutting edge. It is also unproven, therefore requiring early users to be guinea pigs, dealing with first-time installers and plenty of inevitable service bugs.
The same goes for the TV service - breakthrough stuff like 2 TB of DVR storage, recording 8 programs concurrently, and using a Nexus 7 as the remote, all are a good fit for early adopters. This is what they love and they're willing to pay the price in time, money and mental energy, to be in on the action.
However, none of these things compel mainstream audiences. Rather, as Geoffrey Moore articulated in "Crossing the Chasm," his seminal book on technology adoption, mainstream audiences want incremental, evolutionary product improvements. They live by the credo that new services should do no harm to existing services; improvements are welcome, disruptions are not. Moore describes a bell curve in technology adoption - a sliver of early adopters and laggards sandwiching the majority of users who are in the mainstream. And this is where Google Fiber's problem arises; in order for the project to succeed, it will have to extend well beyond early adopters into the mainstream.
Google's "fiberhoods" are meant to concentrate where early deployments occur. But fiberhood rankings seem to rely on a soft expression of interest - a $10 pre-registration fee, essentially an inexpensive buy option that some mainstream users will be attracted by. But there's going to be a moment of truth for them when they're asked to actually commit to Google Fiber. That commitment will take the form of either a $300 install fee or a 2 year commitment to have it waived, plus a decision to drop or curtail services from their existing provider.
These are steep prices for mainstream audiences to pay, particularly when the new service is unproven and the incumbent one, from either Time Warner Cable or AT&T, is likely perceived as at least being decent (example: not many people streaming Netflix these days are complaining about their ISP's delivery quality). Further, the Google Fiber TV service is actually inferior, because it doesn't currently include popular channels like ESPN, TNT and HBO. How many mainstream audiences will be willing to take a flyer on Google Fiber's TV service absent these channels?
Then there are the price considerations - $120/month for Gigabit + TV is only a good deal if you really value faster Internet, and then there's the issue of Google not offering landline phone service, still a staple for mainstream audiences. Phone is included in standard pay-TV "triple play" bundles, so breaking out of these bundles to take Google Fiber would mean far higher monthly fees for many subscribers.
If I were in marketing at Time Warner Cable or AT&T in KC, or even with a satellite operator, I'd be reminding subscribers of all of this right now. And I'd be stirring up FUD (fear, uncertainty and doubt) in the market by beginning to talk about introducing faster broadband speeds, as has been happening elsewhere in the US, to blunt Google Fiber's appeal.
Put all of this together and it wouldn't be surprising if Google Fiber ends up being narrowly deployed, mainly in higher income areas. This would in turn expose the company to charges that it is fostering a digital divide - the opposite of Google's democratic broadband intent.
Google Fiber is an intriguing experiment, but whether it is able to get traction beyond the early adopter audience is a real question.
Categories: Broadband ISPs
Topics: Google Fiber