Friday, March 4, 2016

Google Fiber Vdeo Take Rates Modest, So Far

Not that it matters too much at the moment, but Google Fiber does not seem to be getting many video subscribers, according to Craig Moffett, MoffettNathanson analyst. The primary impact is to limit Google Fiber revenue per account, as high speed access only tends to generate about $70 a month, where video plus Internet tends to generate $130 a month gross revenue.

Over the long term, that difference in average revenue per account could be quite important, for obvious reasons: getting nearly double the revenue per account generally matters quite a lot for any ISP or triple play provider.

According to Moffett, Google Fiber ended 2015 with about 53,000 video subs.

At the end of 2014, Google Fiber had 12,659 video subscribers.

In Google Fiber’s most-mature market, Kansas City, Kan., video adoption is about 23 percent, a reasonable enough rate of adoption.

In Kansas City, Mo., video adoption is about 17 percent.

In Provo, Utah, a newer market, Google Fiber has achieved eight percent.

More important, arguably, is high speed access adoption, which one suspects is quite a lot higher than video adoption. In 2014, Google Fiber Internet access adoption had hit levels as high as 75 percent, for example.

Another survey showed 20 percent adoption after a year’s worth of marketing, figures that compare well with Verizon’s take rates for FiOS after a year’s worth of marketing. On that glide path, it would be reasonable to estimate that, over a few years, Google Fiber would get 30 percent to 40 percent adoption. Some might argue Google Fiber could do even better than that.  

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