According to a recent report by Moffet Nathanson, Google Fiber is yet to establish any new records in its video business, generating anxiety among aspiring telcos and cable operators.
As per data released by U.S. Copyright Office, in 2014, Google Inc (NASDAQ:GOOGL) had only 29,867 video subs to its credit – 194 in Stanford; 7,026 in Kansas City, Kan; 20,140 in Kansas City, Mo; and 2,507 in Provo, Utah. The former is required to maintain this data due to its compulsory license fee requirements.
Further data released by Moffet Nathanson also reveals that Google’s video service has been able to cover only 5% of Stanford market (3,913 homes covered), 13%/53,925 of Kansas City, Kan; 10.5%/192,406 of Kansas City, Mo and 8%/31,524 in Provo.
In regard to the above, the analyst of this research, Craig Moffet, has said that the findings revealthat it is difficult and very time-consuming to penetrate on a big scale in any form of business. Numbers achieved by Google Fiber are still very small though it gets press attention much more than it deserves. Ultimately, it is still no threat to other cable and satellite operators.
Earlier, Google Fiber has been showing concern over high costs of programming, on account of which it even had to increase the price of its TV/1-Gig bundle for new subs in Kansas City. Google’s VP of access service, Milo Medin, even said at COMPTEL conference last October that video was its biggest hurdle and formed the major chunk of the cost structure.
Here, it may be noted that Google Fiber’s video subs figure in Kansas City has increased by more than two times last year. Also, the number of broadband subs (not factored above) is a substantial figure compared to the video totals.
Google Fiber has already expanded its 1-Gig–capable network in Austin, Texas. It is further expected to reach 18 new cities across four metro areas in the South-east U.S. – Atlanta, Ga; Charlotte, N.C.; Nashville, Tenn; and Raleigh-Durham, N.C.
