Google Fiber decided this week to pull the plug on its traditional linear TV product, opting instead to let new internet subscribers choose from streaming TV services. It’s a wonder this didn’t happen sooner.
In a company blog post, Google said consumers no longer need “pricey bundles” with channels they won’t watch. Instead of an expensive linear TV product, Google Fiber will now offer its subscribers the chance to add on either YouTube TV or FuboTV, or just go out into the world and find the streaming services that best fit their needs.
“As we return our focus to where we started — as a gigabit Internet company — we’re also ready to challenge the status quo, to finally come right out and say it: customers today just don’t need traditional TV,” the company wrote.
It’s a logical move for the company. The licensing fees for a linear TV product are expensive, particularly one without significant scale like Google Fiber TV. Estimates from 2017 had the service with fewer than 100,000 subscribers. The path to long-term profitability and improved margins likely doesn’t include a stop in TV land. Besides, YouTube TV has become one of the most popular virtual MVPDs, hanging in there with Sling TV and Hulu with Live TV as stalwarts like AT&T TV Now and PlayStation Vue either fade away or shut down completely.
Turning off TV to focus on broadband has become an increasingly popular move for providers. BELD Internet, a small broadband provider in Massachusetts, last year decided to pull the plug on its cable TV service. In January, both Gigabit Minnesota and Rainbow Communications gave up on TV.
In the meantime, Dish Network seems more focused on building out its 5G network and potentially becoming a fourth national wireless provider than it is on its satellite TV business. As DirecTV subscriber losses are piling up by the millions each quarter, AT&T is also recalibrating its strategy with AT&T TV, a new IP-based video product that should be launching nationwide this month. AT&T TV will become the primary linear service that complements HBO Max, the other key piece of AT&T’s new video strategy.
Even Verizon Fios, with its new “Mix & Match” pricing, has put forth YouTube TV as one of the best options for its broadband subscribers.
Michael Greeson, president and co-founder of TDG Research, said Google Fiber TV’s demise isn’t necessarily a sign that other fiber or IPTV services will shut down, but it does suggest that further virtualization of legacy TV services will continue.
The reasons for Google Fiber to shut down its TV service for new subscribers are numerous and have been in place for years now. So, it’s surprising that the service made it all the way to 2020.
Back in 2017, Google Fiber was already phasing out linear TV. When the company announced imminent launches in San Antonio and Louisville, it said it would not be offering the TV service add-on in those markets. Cathy Fogler, then head of sales and marketing for Access, the Google division that houses Fiber, was careful to note that the TV product wasn’t going away but also seemed to acknowledge that the writing was on the wall.
“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. We’ve seen this over and over again in our Fiber cities,” she wrote in a blog post.
The only surprising aspect of Google Fiber TV heading out the door is the company’s decision to bundle FuboTV as well as YouTube TV for fiber broadband subscribers.
“Why bring in a second vMVPD to compete with your own, especially since you have already have a history of offering your own branded pay TV service? Consumers can subscribe to FuboTV without Google Fiber’s partnership, so it’s not as if the addition was motivated by antitrust concerns,” Greeson said.
Whatever Google Fiber’s reasoning for bundling FuboTV, the company seems to have finally, fully accepted that selling broadband and letting someone else worry about the video is a better option than continuing to prop up a dying service.