Haynes & Company Sheds More Light On Google Fiber Study

NEW YORK, Oct. 7, 2014 /PRNewswire/ -- Haynes & Company, (www.haynesandcompany.com), a leader in innovative grassroots research and analytics for institutional investors, announced today additional findings related to its study of Google Inc.'s high-speed fiber optic internet service in Kansas City. 

Google launched the ultrafast internet service in Kansas City beginning with its community-led "pre-registration" program in 2012.  Turning to this new model for deciding where, and when, to launch its 1GB service plus its first-of-its-kind, lifetime free service option hold the potential of closing the "digital divide". To assess the impact of the roll out, Haynes & Company sent a team of researchers door-to-door in six, low-income neighborhoods to gauge both the awareness and the adaptation of the fiber optic service.

The most compelling takeaway was that only 16% of households surveyed had subscribed to the service. However, in a bright spot for Google, the vast majority (81%) of those households that have not yet subscribed had heard of the service, resulting in a 97% product recognition rate for Google Fiber. Moreover, of those households that had heard of Google Fiber but were not yet subscribers, 37% rated themselves as likely to sign up in the next 12 months. And, a full 12% said they would definitely sign-up.

"While the adaptation rates are relatively low, Google's efforts are paying off in that consumers are well aware of the product," said Elizabeth Haynes, Founder and President, Haynes & Company. "However, what we also found in speaking to people is that one thing that is keeping them away is cost, this despite Google's attempt to structure appealing payment plans."

Twenty-three percent of those likely to sign up in the coming year cited cost as a factor that could keep them from switching or installing Google Fiber.

The Google Fiber service, which costs $70 a month, offers speed of one gigabit a second, about 100 times faster than the national average. A slower service – about half the speed of the national average – is free after a $300 installation charge. It is this free service that holds the greatest potential for closing the digital divide for lower-income customers.

As Google continues to roll out its fiber product, Haynes & Company believes that significant opportunity remains to capture market share; however, it will require providing more than just access. 

"Google has a real foothold in the mobile phone market with its Android operating system, and they should leverage that," added Haynes. "For example, by bundling the one-time installation fee with mobile-phone plans and having Google Fiber available for sign-up in carriers' stores where benefits of the service can be reinforced, we believe Google could markedly increase the uptake rate for the free service."

About the Survey:
Haynes & Company conducted research in 2013 and 2014 for Sanford C. Bernstein and The Wall Street Journal on Google Fiber in Kansas City. The findings are based on in-market fieldwork and provided metrics around product awareness, likelihood to sign up, likelihood to purchase, and service and satisfaction levels with an income-based demographical overlay. Haynes & Company utilized door-to-door canvassing techniques first pioneered by the U.S. Census and U.S. political campaigns for this research. Researchers went out to specific Kansas City "Fiberhoods" and knocked on doors to survey individual households about Google Fiber.

For more information about the Google Fiber study, including an interactive graphic that allows users to view the specific Fiberhoods surveyed with relevant Haynes & Company data as well as US Census-tract income levels overlaid, visit the Haynes & Company website at: http://www.haynesandcompany.com/FiberhoodIncome.html

About Haynes & Company:

Haynes & Company (H&Co) is a research and analysis firm that works with institutional investors on their consumer-led investments. Be it publicly traded stocks and bonds or corporate acquisition due diligence and portfolio company management, the firm's approach is unique in the marketplace. Its analysis relies on complex, in-field observations that go far beyond standard "channel checking" or traditional market research. Working with clients - from the most nimble hedge fund to multi-billion private equity firms - on time-pressing riddles, Haynes & Company unlocks insight and presents findings that are innovative, creative, and data-driven. 

SOURCE Haynes & Company