Posts for 'Google Fiber'

Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Rather than focus on just one story this week as we usually do, today we do segments on 5 different stories that caught our attention. First we pick up on last week’s podcast about the dustup between YouTube TV and NBCUniversal. The companies avoided going over the cliff together and managed to extend their relationship. But it is a harbinger of more fights between networks and virtual (and traditional) pay-TV operators as the size of the pie continues to shrink due to cord-cutting.

Then Colin and I have a spirited debate about Google’s Fiber TV, which is being retired, and the broader question of whether Google Fiber’s 1 gigabit per second broadband service is a worthwhile product offering (Colin thinks it is and I think it isn’t, and I haven’t since it launched way back in February, 2010, see “Google’s Fiber-to-the-Home Experiment Could Cost $750 Million or More.” Also see "Google Fiber is Out of Synch With Realities of Typical Consumer Technology Adoption" from July, 2012 and "No Surprise, Google Fiber is Falling Short of Expectations" from August, 2016.)

From there we discuss the steep drop in L7 TV ratings that has continued in the first week of this Fall season. But even at these depressed levels, I assert that the most popular broadcast TV shows like “NCIS” still draw audiences that may likely be bigger than the first 7 days following the drop of a popular show on a big SVOD service like Netflix. Related, we discuss new Kantar data on SVOD churn in Q2. For more insight, have a look at my post from November, 2019, “Will Spinning Video Subscriptions Become a Thing?”

Finally, there’s a game of musical chairs happening in our industry and this week’s move by Kelly Campbell from president of Hulu to president of Peacock is just the latest example. We discuss why these executives’ shuffling matters to all of us as consumers.

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Online video is booming. But that doesn’t mean all industry initiatives will succeed. Two examples in just the past two days illustrate the point. Yesterday Verizon announced it was acquiring Vessel for an undisclosed amount in what appears to be a straightforward asset purchase and talent acquisition. And on Tuesday, Google Fiber announced that it was stopping all expansion into new markets. Both companies’ leaders, Jason Kilar at Vessel and Craig Barratt at Google Access, will be departing their positions.

While the two companies operate in distinct segments of the market - Vessel in content and Google Fiber in infrastructure - both were bets on new business models and consumer demand that do not seem to have panned out.

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This morning’s WSJ article, “Google’s High-Speed Web Plans Hit Snags” chronicles how Google Fiber has fallen way short of expectations and has experienced ongoing technology/deployment issues since its initial rollout 4 years ago. None of this surprises me and loyal VideoNuze readers will recall I was deeply skeptical from day 1, when I wrote, back in July, 2012, “Google Fiber is Out of Synch With Realities of Typical Consumer Technology Adoption.”

Google Fiber’s main value proposition and differentiator have always been 1 gigabit per second broadband service. But the problem is that very, very few people wake up in the morning wishing they had 1 gigabit so that, for example, they could stream 4K videos on 10+ devices at the same time, which is one of the key benefits Google Fiber promotes. Even as streaming video usage in the home has soared over the past 4 years, with the proliferation of high-quality video services and connected TV devices, most users have been satisfied with the quality of their broadband connection.

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Google Fiber has captured an eye-opening 75% of homes it passes in certain medium-to-high income Kansas City neighborhoods, according to an extensive new analysis from Bernstein Research. The firm employed a market research company to conduct a door-to-door survey in 5 KC neighborhoods in which Google Fiber has rolled out. This is the first research I'm aware of revealing how Google Fiber may be performing (Google itself has never shared any detailed data on Google Fiber).

In Wornall Homestead, the highest household median income neighborhood ($116K) Bernstein surveyed, it found that 83.1% of respondents were taking Google Fiber service - 15.3% for the $120/mo pay-TV+ broadband bundle, 52.5% for the $70/mo 1 Gbps broadband-only service, and 15.3% for the free 5 Mbps broadband service. This contrasted with Community College, the lowes household median income neighborhood ($24K) surveyed, in which 27.2% of respondents were taking Google Fiber service - 7% for the $120/mo pay-TV+ broadband bundle, 19.2% for the $70/mo 1 Gbps broadband-only service, and 7.3% for the free 5 Mbps broadband service.

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Investment firm Bernstein Research has released the results of a proprietary door-to-door survey of 204 Kansas City households which reveals strong interest in Google Fiber service among early adopters, with potentially strong adoption rates among mainstream audiences longer-term as well.

Bernstein found very high awareness of Google Fiber, with 98% of respondents being aware of the service, no surprise given the level of local coverage it has received. Of the 204 respondents, 52% said they would definitely or probably buy Google Fiber and 25% said they may.

However, recognizing the difference between what people say they'll do vs. what they'll actually do, Bernstein forecasts that 15-20% of homes will in fact subscribe to Google Fiber in the first phase of its rollout. Given the uncertainties around competitive responses to Google Fiber, Bernstein is less clear about longer-term adoption, though it is suggesting 40-50% is possible eventually.

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I'm pleased to present the 172nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we first discuss Google Fiber, which Google announced this past Tuesday would roll out to a second city, Olathe, KS. Nonetheless, as we discuss, it still feels like Google Fiber is a hobby for Google, though its executives recently asserted otherwise. Neither Colin nor I quite understand what Google Fiber's actual market impact or game plan is, and we are skeptical that there's a business case to support its broader rollout.

We then turn our attention to another Google-related item, which is that YouTube announced this week it is now attracting 1 billion visitors/month, even as (according to my analysis), its U.S. online-only traffic has dropped by 32% year-over-year. But, because comScore doesn't measure mobile access, this isn't an accurate portrayal of YouTube's reach, which is clearly expanding. Colin has further data that adds color to the situation.

Separate, Colin has released his excellent new white paper, "Second-Screen Apps for TV" (free download here)

And a reminder to sign up for "Sizing Up Apple TV" a free video webinar on April 2nd featuring Brightcove's Jeremy Allaire and me.
    
Listen in to learn more!

(update - the correct pronunciation of Olathe, KS is "O lay the" (thanks Frank Hughes!).

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Google announced late yesterday plans to extend its Google Fiber service to a second city, Olathe, KS (population 125,000), in Johnson County, about 30 minutes from Kansas City, where Google Fiber has been initially deployed. With the news, the question once again arises, if Google Fiber isn't a "hobby" (as Google executives recently stated), then what is it exactly? And by extension, what are its real implications for broadband ISPs, consumers and over-the-top video?

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I'm pleased to present the 156th edition of the VideoNuze-TDG podcast with my weekly partner Colin Dixon, senior analyst at The Diffusion Group. Google is all over the online video industry and today is an "all Google" podcast, as we focus on updates related to Google TV, Google Fiber and YouTube.

First up is Google TV, and Colin discusses new features including voice-based search, the PrimeTime TV/movies app and updated YouTube app, as well as a new AirPlay-like app that allows users to watch video through their Google TV that was discovered on their Android devices. Colin views all of these as the continued evolution of Google TV, which long-term he believes will become an interesting device.

Next up, the first installations of Google Fiber occurred this week in Kansas City. The much-hyped project promises to deliver 1 gig speeds for $70/month, though a profile of an early customer indicated actual speeds around 600-700 mbps. Still, that's a huge jump from typical broadband ISP service and Colin shares scenarios of what may happen when speeds and bandwidth caps are no longer constraints.

We finish up with YouTube, which this week revealed that it will re-invest in 30-40% of the original channels it helped launch, meaning 60-70% won't get additional funds. Like TV networks, YouTube is learning what works and what doesn't, and re-upping accordingly. It's also worth noting that the YouTube app launched on Nintendo Wii this week, further spreading YouTube's reach into the living room.

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If you were trying to tune out last week, whether lying on a beach or on a family getaway, you didn't miss all that much exciting online video-related news. However there were some items worth noting and below I've highlighted five that caught my eye.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 143rd edition of the VideoNuze-TDG Report podcast. In this week's podcast Colin and I discuss the prospects for Google Fiber, and specifically whether incumbent pay-TV operators and broadband ISPs should be "very, very afraid," as a report from industry analyst SNL Kagan asserted earlier this week.

Google's innovative spirit and willingness to spend heavily on Google Fiber is terrific, but as I said last week, I think its big challenge will be penetrating beyond a core early adopter audience. While uncapped gigabit broadband service is indeed compelling, more mainstream audiences will weigh its benefits against the costs of its missing features, being a guinea pig for an unproven service and increasing their monthly bills for TV and phone service, among other things.

In a sense, Google Fiber feels to me a little bit like Time Warner's Full Service Network pilot in Orlando in the mid-90's, with its high deployment costs, disruptive innovation, untested consumer premise equipment, lack of scalability and massive hype. That's not to say Google Fiber will end up like FSN as a complete flameout, but it's still not clear to me what the real impact of the project is going to be. I think incumbent operators need to be vigilant, but there's no real cause for fright, at least not yet anyway. Colin is a bit more bullish on Google Fiber, though I suspect that's because he's so enticed by the idea of a having a gigabit connection himself (being the early adopter that he is!).

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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.

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