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Google IPTV snags interest of 60% of passed homes in network test bed

Google's IPTV + broadband strategy in Kansas City appears to be paying off: it has enticed 30% of possible subscribers in its Kansas City metro area footprint to pay a $10 pre-registration fee, while yet another 30% of the qualified population has expressed interest in Google Fiber's high speed Internet and video offerings.

"Google Fiber has conducted a remarkable marketing campaign," said Glen Friedman, president of research firm Ideas & Solutions! "Historically, pay-TV 'overbuilders' penetrate about one-third of their marketplace over time. This level of interest in the beginning is unprecedented. For Google Fiber, the challenge moving forward is to do an equally good job on the fulfilment."

The Internet giant has employed a host of measured marketing tactics in Kansas City beyond the usual advertising and news coverage. Google and Google Fiber used their online advertising juggernaut, together with social media; they also hosted local promotional events planned by neighbourhood organizers, opened a Google Fiber store, operated a Google ice cream truck and planted yard signs, the firm noted.

Google's marketing efforts paid off with a positive perception among subscriber prospects. The study measured 11 brand attributes comparing Google with the incumbent pay-TV operators in the Kansas City "fiberhoods," finding that even its weakest brand attribute - consumer privacy protection - scored higher than that of the pay-TV operators, collectively.

Nearly 60% of respondents trusted Google with their privacy, while only about 40% trusted their pay-TV operators.

When asked about IP-based TV applications on devices, about 88% of respondents selected Google Fiber as the better provider, compared to 12% who favoured the incumbent. And in terms of cloud-based services, 90% of respondents picked Google, compared to 10% for the existing pay-TV operators.

The survey data reflects that consumers associate parent company Google with the Internet and therefore are more accepting of Internet-related services from Google Fiber than from their pay-TV providers.

"The downside to such high expectations is living up to them," said Friedman. "It's not easy to deliver and maintain a high standard of customer service and customer experience. Although Google Fiber ranks higher than the incumbents in 11 areas of branding, the company is unproven in its ability to deliver and fulfil a complex Internet and video service offering."

One specific area measured where the existing pay-TV operators have some advantage is with video. A key reason for consumers not making the switch to Google Fiber is the concern that they won't receive all their favourite channels. Of the survey respondents who have paid the pre-registration fee, 40% intend to get broadband services from Google Fiber but take pay-TV services from another company.

When it comes to video, the incumbents have the advantage of long-standing programming relationships. "Unfortunately, video is their lower-margin product and Internet is their higher-margin product, making any erosion of their Internet subscriber base especially problematic," said the firm. "With its strong marketing, Google Fiber has gotten the attention of Internet subscribers. It will now be up to the incumbents to strategise their response."

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