Bundled Communication Services - US - November 2013
“Cord-cutting has been discussed in mainstream media as a problem for pay TV services, while a long-term decline in home phone services has been tied to cellular phone service. Looking forward, home internet may also be plagued by cord-cutting, placing all three legs of the home bundle in jeopardy.”
– Billy Hulkower, Senior Analyst, Technology and Media
Some questions answered in this report include:
- Which cords will see further cuts?
- OTT content: Friend or foe?
- Will anyone pay for 500 Mbps service?
Increasing ARPU for home communication services is likely to become increasingly difficult: Consumers in multi-person households with cell phone service, home internet, and home video may well be paying well over $300 per month already, even when selecting moderately priced plans with limited add-on features. The average household subscriber is paying $154 per month for their combined TV, home internet, and home phone, even when including those who subscribe to only one or two of these three services.
Simultaneously, massive discounts on offer for changing pay TV service provider have already resulted in a trend to shop for the lowest-price service for home communications, but the lowest price available may be more readily achieved by reducing the number of subscriptions to the home, an alternative that is becoming more attractive as cellular plans offer unlimited minutes, and as over-the-top (OTT) video content viewership rises. Even home internet, the engine of growth for home services, is potentially at risk as consumers become acclimated to using 4G cellular data outside of the home. With these competitive factors in mind, this report explores how home service providers can ensure that subscription numbers and sales continue to grow.
This report covers subscriptions for television, home internet, and home phone service, including when these services are sold as bundles from the same provider and when sold individually. Sales data for this report includes sales of all three services. Cellular service is discussed in relation to the desire for a single bundled product including all four services, but sales for this service are not included in Market Size or Segmentation data.
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