Google Fiber threat to pay TV overhyped, analyst Moffet says

As threats to the pay-TV business go, Google Fiber (NASDAQ: GOOG) is not terribly impressive, says media analyst Craig Moffett.

"To cable and satellite investors, Google Fiber is a bit like Ebola: very scary and something to be taken seriously ... but the numbers are very small, it gets more press attention than it deserves, and it ultimately doesn't pose much of a risk (here in the U.S. at least)," he writes.

Sure, he concedes, the video-programming part of the Google Fiber service is growing, doubling its subscriber base in the Kansas City, Mo., area to more than 20,000 over the past year . But its market share remains relatively infinitesimal.

"Each time we revisit the numbers, we are mostly struck by how incredibly small they are," Moffett adds. "To be sure, Google Fiber is growing very quickly. … But it is testament to how hard, and how slow, it is to build scale as an over-builder that Google's subscriber total after five years of trying amounts to just 0.026% of the U.S. cable market and just 11.0% of the Kansas City market."

The numbers, however, do not reflect the amount of penetration Google Fiber has with broadband-only services--a number that could be much higher.

Will Google stay in the pay-TV business? The company recently revealed that program-licensing fees are much more confounding than it originally anticipated. It just raised video-package pricing by $10, to $130 a month, for new video customers.

For more:
- read this Re/code story
- read this DSL Reports post

Related links:
Google Fiber incites SMB battle against CenturyLink, Comcast in Provo, Utah
Google Fiber raises pay-TV rates to $130 for new users
Google Fiber chief: program rights are 'biggest impediment' to deployment
AT&T challenges Google Fiber, Consolidated with 1 Gbps in Kansas City area
Google Fiber building fiber huts in Kansas City suburb of Shawnee
Google Fiber expansion showcases lack of affordable high-speed services

Read more on