Thursday, October 5, 2017

Google Fiber Gives Up On Traditional TV -

Google Fiber has confirmed that the company is ditching television service moving forward. In a blog post, the company confirmed that it would not be selling TV services in the company's more recent target markets of San Antonio and Louisville. While Google Fiber says it will keep providing TV in existing markets (for now), customers in many of these regions were told this week they'll be seeing some notable rate hikes courtesy of broadcasters pushing endless rate hikes for the same content.

In the company's post, Google Fiber's Cathy Fogler indicates users in these markets will be nudged toward over the top streaming options, with a likely focus on Google's own YouTube TV streaming platform.

"Whether it's through YouTube TV, Hulu, Netflix, or more specific targeted services -- there are so many ways to watch what you want, when you want it," proclaims Fogler. "And Google Fiber's superfast Internet allows customers to make the most of all these streaming choices by providing the bandwidth to use multiple devices and apps at the same time."

The million dollar question now is: what happens to customers in existing markets? While Google Fiber refuses to release subscription numbers, analysts have noted for years that the sign up rate for Google Fiber's TV offerings is relatively abysmal. Whereas many estimate Google Fiber has somewhere between 500,000 and 1 million broadband subscribers, the last reliable estimate pegged Google Fiber's TV subscribers at under 100,000.

Things will only get harder for smaller pay TV providers. As we enter a period of mindless merger mania and regulatory apathy, fused companies like Comcast NBC Universal and AT&T Time Warner will be jacking up the cost of their programming for everyone but themselves. Smaller cable companies lack the size -- and by proxy leverage -- to negotiate the same rates as these larger companies. Many have indicated that as margins tighten, they too will be giving up on TV, focusing on broadband, and pushing users toward over the top streaming services.

Of course that's no panacea for consumers and smaller competitors either. Companies like Comcast and AT&T still hold the licensing rights necessary for these streaming services, allowing them to slowly squeeze out smaller companies. And with net neutrality set to be killed by Trump's FCC, these sector giants can use usage caps and overage fees to give their own content an unfair market advantage against services like YouTube TV.

All of that said, It it seems unlikely that Google Fiber will keep servicing a traditional TV platform that's not growing and bleeding money, but for now Google Fiber insists nothing will be happening to existing Google TV customers.

"For our existing markets with TV as a part of their product offerings, nothing is changing -- although more and more of you are choosing Internet-only options from Google Fiber," stated the company.

Expect that message to change sometime next year, when Google Fiber discontinues these services -- a message that I'd guess will be accompanied by some kind of heavy discount for YouTube TV.

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