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Cutbacks in home communications and entertainment services have yet to emerge as a measurable trend, despite the ongoing recession. This nationwide survey indicates that most consumers are spending the same amount on phone, Internet and multichannel video as they’ve spent in the past. Respondents say they would rather keep Internet, video and voice services in their budgets than any other type of expense, including gym memberships, personal care products and apparel. But the results also point to customers becoming more aware of ways to spend less on those services, such as converting to lower-priced Internet service tiers or watching TV shows online for free. This report provides details on our survey findings, including a rich array of demographic variables and predictions about customer behavior over the remainder of 2009. Thirty-nine charts are included.
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TABLE OF CONTENTS
Introduction
Market Conditions
--Industry Feedback
Methodology
--Demographic Data Collected
Results
--Phone Service
--Internet
--Video
--Spending
Consumer Plans for Home Entertainment and Communications Spending
What Won’t People Cut?
TABLE OF FIGURES
Figure 1: RBOC Access Line Losses
Figure 2: Multichannel Video Customer Growth
Figure 3: U.S. High-Speed Internet Net Additions
Figure 4: Respondents by Age Group
Figure 5: Respondents by Location Type
Figure 6: Respondents by Annual Household Income
Figure 7: Respondents by Living Situation
Figure 8: Respondents by Educational Attainment
Figure 9: Home Subscription-Based Services per Survey Population
Figure 10: Phone Service Types per Survey Population
Figure 11: Phone Service Types per Age Group
Figure 12: Mobile Phone Users per Age Group
Figure 13: Over-the-Top VoIP Users per Age Group
Figure 14: Phone Service Types per Household Income Level
Figure 15: Over-the-Top VoIP Users per Household Income Level
Figure 16: Landline Phone Types per Living Situation
Figure 17: Mobile Phone Users per Living Situation
Figure 18: Over-the-Top VoIP Users per Living Situation
Figure 19: Landline Phone Usage per Home Type
Figure 20: Mobile Phone Usage per Home Type
Figure 21: Over-the-Top VoIP Usage per Home Type
Figure 22: Phone Service Usage per Location Type
Figure 23: Internet Users per Broadband Service Type
Figure 24: Residential Internet Service Types per Region
Figure 25: Internet Connection Modes per Location Type
Figure 26: Residential Internet Subscription Categories per Home Type
Figure 27: TV Subscribers per Multichannel Video Service Type
Figure 28: Video Service Subscription Types per Age Group
Figure 29: Video Service Subscription Types per Household Income Level
Figure 30: Regional Differences in Multichannel Video Customer Mix
Figure 31: Multichannel Video Customer Mix per Location Type
Figure 32: Multichannel Video Customer Mix per Living Situation
Figure 33: Multichannel Video Customer Mix per Education Level
Figure 34: Monthly Spending for Home Entertainment and Communications Services
Figure 35: Monthly Spending for Home Entertainment and Communications Services per Household Income Level
Figure 36: Phone Users’ Plans for Service in 2009
Figure 37: Internet Users’ Plans for Service in 2009
Figure 38: Consumer Plans for Video Service in 2009
Figure 39: The Last Discretionary Costs That Consumers Are Willing to Cut
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Consumers Rank Internet Service as Vital, But Don’t Plan to Pay More to Get Faster Speeds
SILVER SPRING, MD—Cable and telephone companies are offering their customers faster and higher-priced broadband services at a time when consumers appear reluctant to spend more money for greater data speeds.
A new nationwide survey, sponsored by market research provider Pike & Fischer, found that nearly 30 percent of Americans view their Internet subscriptions as the most important discretionary item in their household budgets—and the service they are least likely to cut if they are forced to trim their spending during the current economic downturn.
However, only 10 percent of the 600 survey participants said they are willing to pay any more for Internet service than what they already spend. Another 10 percent said they plan to switch service providers before the end of the year.
“This suggests to us that consumers view an Internet connection as a vital home communications tool, but either can’t afford or don’t want to spend money on the faster speeds that are now available,” said Scott Sleek, P&F’s Director of Broadband Advisory Services. “About the only change they seem willing to make is switching to another provider to get a better deal.”
The survey results were released on the heels of Long Island-based Cablevision’s introduction of an Internet service that can deliver downstream speeds of more than 100 megabits per second (Mbps) for $100 per month. Verizon is offering a broadband tier at speeds of up to 50 Mbps for $140 per month. More than a third of the participants in the P&F survey say they currently spend somewhere within that range for Internet, TV and/or phone service combined.
Results of this study, including detailed demographic breakdowns, are available in a new Pike & Fischer report, Household Telecom Spending and the Economic Crisis: A Consumer Survey.
The report is priced at $1,295 and and available for purchase at www.broadbandadvisoryservices.com. For analyst commentary or to request a briefing, contact Scott Sleek at 301-562-1530 x291 / ssleek@pf.com.
Pike & Fischer, a BNA Business, offers a host of legal and business products covering the telecommunications industry. For information about Pike & Fischer’s Broadband Advisory Services, visit www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at 973-718-4703 / jping@pf.com.
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Scott Sleek
Scott Sleek, Director of Pike & Fischer's Broadband Advisory Services, oversees the day-to-day operations of our market research services and leads the development of analytical publications and briefings. As part of his duties, Scott serves as Managing Editor of our online newsletter Broadband Daily. Scott also oversees the development of all Research Reports & Briefs and manages the Trackers & Projections database. He regularly tracks subscriber growth, market penetration and revenue growth in the markets for high-speed Internet, packet-switched telephony, interactive TV, wireless data and other forms of broadband communications and entertainment. Scott also fields all requests for customized research and works closely with customers to fulfill their market data and analysis needs. Scott has more than 20 years of experience as a writer, editor and researcher. Contact Scott at 301-562-1530, x291 / ssleek@pf.com.
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