Google Takes No Gambles With KC TV
It would have been interesting if Google had become more creative with the channel offerings for its new TV service in the Kansas City area. Certainly, cable operators would have been interested if it took some risks, possibly giving them some ideas about how to save money.
With its deep pockets and plans to launch the Google Fiber TV/Internet service in just the single market, Google could have broken away from the traditional cable bundle that drives up prices for distributors and consumers.
The bet is that Google Fiber is essentially a research tool for Google -- a chance for it to delve into viewer engagement and interaction with ads from a new perspective. Sure, it would like as many customers as possible, but this is a laboratory -- this is R&D.
How much so? One of its offerings is free Internet service with just a $300 construction fee.
The free service, however, is slower than the core of Google Fiber: the super-fast Gigabit Internet access. Google wouldn’t say TV is an afterthought, but one could be excused for disagreeing.
The only way to get TV service is in a package with the Gigabit access. Google’s vastly different pricing approaches are interesting. There’s the gratis opportunity. And then two options that aren’t much different from what other operators offer: broadband alone ($70 a month) and TV/broadband ($120).
For TV, Google bills the offering as “All your favorite channels, and more.” Google hasn’t taken any chances in trying to get a sense of what customers will go without, which could have saved it in carriage fees. It's not trying to use its heft to maneuver to offer a la carte pricing.
Google Fiber has an ESPN suite and the traditional package of networks from all the large cable programming bundlers, be it NBCUniversal, Viacom or Discovery. It’s not looking to cut costs with sports, as it’s offering a full slate of sports programming beyond ESPN such as the Big Ten Network, MLB Network and even the Longhorn Network. (Longhorn is owned by ESPN and there may be a Google-ESPN conspiracy to jab Time Warner Cable, which is competing with Google in Greater Kansas City and has refused to carry it.) Google also has signed deals with independent networks such as Current TV and WGN America.
Looking at Google’s TV lineup, it becomes clear how much of a stranglehold the big programmers have on cable/satellite and telco TV operators. Wow -- have they built groups of networks that really give them muscle such that operators have to take pretty much all or none? There's little wiggle room.
Go without ESPN and brand yourself as a non-sports provider? There would be no Disney Channel, since the two share the same owner.
Look to avoid Fox News Channel in a blue state? News Corp. won’t offer FX.
Look to appeal to a slightly older audience and go without an MTV or VH1? There would be no Jon Stewart or Nick for the kids.
Operators really have few options in negotiations. Google, which could have created some, has chosen not to test any limits.