It’s been a few months since Google Fiber began really spreading through its first locale, Kansas City. There’s been trepidation about the plan since Google announced it back in 2010: a fiber-optic broadband network designed for gigabit speeds at $70 or less a month. To compare, the highest speeds its competitors offer don’t typically reach anywhere near that speed, and can cost hundreds of dollars a month. But the first wave of installations have happened in Google’s first test city. And the results coming back aren’t too surprising if you’ve been following the entertainment industry for the past few years; not surprising, but definitely still important.
Good for Google
The first big result is the one most expected: people love Google Fiber. Resounding responses from the communities that have had it installed are that the speeds are fast, the service is reliable, the installation is quick, painless, and on-time, and (relative to the speed provided) the price is incredibly low.
This is good news for Google, of course. The talk around Fiber for some time has painted it as a sort of test-run or experiment. A lot of people thought that Google couldn’t really turn Fiber into a successful business venture, because the logistics were too large and the market was already too saturated with competitors. People assumed that Google must just be looking to drive competition higher. This narrative makes some sense on its own, admittedly. Competition has definitely seen some growth – as Fiber began entering Kansas City, Time Warner Cable boosted their speeds in the area by 30 to as much as 100%. And immediately after Google announced Austin, Texas as their next Fiber target, AT&T announced a similar 1Gbs plan for Austin, and Time Warner Cable even announced a city-wide wireless service for its customers in Austin.
So most people just sort of assumed that Google was planning to sink a few billion dollars into the industry with little pay-off on its own, just to force ISPs to speed up and better the internet as a whole. It seems like the kind of thing Google might do, and they certainly have the money to do it. But, as it turns out, Google wants to do more than push their competitors. They want to be the competitor. Google Fiber executive Milo Medin stated 2 weeks ago that “We expect to make money from Google Fiber.” Google isn’t going to stop at a few cities, and they don’t seem to be slowing down, as everyone thought they would. This is more than an experiment, it’s a real business venture. And it’s going very well for Google.
And also good for… Netflix?
The other big winner coming out of the Kansas City results is the much-less-expected Netflix. As it turns out, when videos don’t have to buffer and they load instantly, Video-On-Demand services become much more demanded. The blisteringly fast speeds that Google Fiber brought to Kansas City, made even easier by the fact that Google Fiber’s television package has Netflix built-in, gave the service a sizable boost in views and customers.
This isn’t the only good news for Netflix these days. The content-distributor has recently entered into the market of content-creation. After the huge success of their original series House of Cards, Netflix has revived the fan-favorite Arrested Development to positive reviews. They’ve grown considerably since their price-changes in 2011 that cost them a reported 800,000 subscribers.
Traditional Broadcast Television seems to have a lot to fear. Not only does Google Fiber bring the high-speed internet that has Cable and Internet companies worried, it is outfitted with a television plan all of its own. And the speeds that it brings make Video-On-Demand like Netflix and Hulu stand out even more than they already do in the modern world of streaming, mobile apps, and DVRs. Combine all that with the new entries into content creation that Netflix (and even Amazon) are bringing and the consistent drop in audience numbers for broadcast television, and the future of both the cable companies and the networks they bring us is up in the air.
Cable and Internet companies are scared of Google Fiber – and pretending that people don’t want faster speed isn’t enough. It seems that if Time Warner Cable, AT&T, and the like are going to survive the wave of innovation that Google Fiber brings, they’re going to have to come up with something new, and fast. It’s likely that they’ll have to partner in some way with the other obsolescent industry, the networks, as they flounder about under the pressure of Video on Demand.
ABC, Time Warner, Comcast, NBC; names that have dominated entertainment for decades are now starting to hear the ringing of the Death Bells. Can they save themselves in time? Or will Google Fiber be the final nail in their coffin?