Google Fiber announced today that it will be dropping its TV package option to focus solely on providing high-speed internet service. It will still provide the service to existing customers who pay for it, but the company says “customers today just don’t need traditional TV” anymore when so many options are available online through over-the-top TV services and streaming platforms.
“As of today, Google Fiber will no longer offer a linear TV product to new customers. For our current TV customers, we know you have come to rely on Google Fiber TV and we will continue to provide you with traditional TV service,” the company said in a blog post. “And we’ll be happy to help everyone explore other options to get their favorite programming the way TV is watched now — over the Internet, with the virtually unlimited choice and control online viewing provides.”
Google says it is partnering with FuboTV, an over-the-top provider that specializes in sports programming. That way, new Fiber customers can sign up for Fubo alongside an internet subscription. Google says this is in addition to YouTube TV, its own pay-TV service that has some similar benefits to Fubo.
Google Fiber, which exists under the Access division of Google parent company Alphabet, is positioning this as a liberating choice for consumers to take control of their media-viewing destinies. But it’s not quite that simple. The truth is that Google Fiber was forking over huge licensing fees to carry traditional TV channels, including big-name cable and sports networks.
In many cases, what Google Fiber was paying was not the same as what competitors like Comcast and others pay to bundle traditional cable with internet service, due to legacy deals and vertical integration between internet service providers and cable companies. (For example, Comcast operates both its Xfinity cable and internet service while also owning NBCUniversal.)
According to The Washington Post, “the cost of acquiring video content was ‘the single biggest impediment’ to Google Fiber’s wider rollout, a top Google Fiber executive, Milo Medin, told an audience in 2014. Compared with more established service providers, Medin said, Google was paying twice as much for video rights.”
There are other issues, too. Google Fiber was offering a TV option — specifically an IPTV option and not cable or satellite — particularly so it could entice more traditional double- and triple-play customers in the Midwest and other midsize American cities, where Google Fiber was focusing its efforts early on. But the company has struggled over the past five years to make inroads in those markets as the cost of deploying fiber internet was astronomical and the challenge of beating out incumbents like Comcast became increasingly costly.
In 2016, Google Fiber paused its rollout to nine additional cities amid a restructuring and a round of layoffs, after the company became a separate business unit under Alphabet proper and no longer existed under the core Google umbrella. (Moving Fiber outside Google meant it had more stringent financial obligations to turn a profit and not excessively waste money.)
Google Fiber has since experimented with its Webpass subsidiary to try to deliver high-speed internet not through fiber optic cables, but with over-the-air transmission technologies. (In one market Webpass was deployed, Boston, Google eventually pulled the plug on that operation, too.) The company has also slowed its overall expansion considerably. As it stands today, Google Fiber is only available in 18 markets throughout the US.
Last year, Google Fiber suffered yet another public defeat after it had to permanently suspend operations in Louisville, Kentucky after attempting a method of fiber installation called “shallow trenching” that would have sped up its deployment time, but that failed to hold up over time due to how close to the surface the cables were lying. Instead of starting over from scratch, Google Fiber decided to end service on April 15th of last year. Google Fiber is now paying back the city of Louisville close to $4 million for botching the whole project.
So it makes sense that, in 2020, Google Fiber doesn’t quite need a TV service that it pays a fortune for, especially as it’s still working to make its internet service an attractive option for consumers and a financially sound one for its parent company.