Table of Contents
Executive Summary
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- The market
- Over 260 million subscriptions
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- Figure 1: Number of households subscribing to home communication services, 2011-14
- Shake-up via mergers ahead
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- Figure 2: Market penetration of leading home communication service providers, July 2014
- The consumer
- Bundles favored by higher-income groups
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- Figure 3: Subscription to bundled services, by household income, August 2013-March 2014
- Subscribers give high-speed internet a thumb’s up
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- Figure 4: Interest in high speed internet service, July 2014
- Subscription video on demand takes a bite out of 18-34s
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- Figure 5: Reasons for not subscribing to pay TV service, July 2014
- What we think
Issues and Insights
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- Are over-the-top services an indication that traditional pay TV isn’t working?
- The issues
- The insights
- Is the home phone dying?
- The issues
- The insights
Trend Applications
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- Trend: Make it Mine
- Trend: Extend My Brand
Market Size
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- Key points
- Pay TV treading water
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- Figure 6: Pay TV subscriptions, 2009-14
- Internet industry growth engine
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- Figure 7: Home internet subscriptions, 2009-14
- Home phone sliding
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- Figure 8: Home phone subscriptions, 2009-14
Market Drivers
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- Key points
- High-speed most important to 18-44s, high income
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- Figure 9: Interest in higher-speed internet, July 2014
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- Figure 10: Interest in higher-speed internet service, by age, July 2014
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- Figure 11: Interest in higher-speed internet service, by household income, July 2014
- 4K to drive demand for greater internet speeds
- Premium channels draw subscribers from a wide income spectrum
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- Figure 12: Subscription to premium channels, by household income, January 2013-March 2014
- PPV, VOD, and DVR
- PPV
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- Figure 13: Frequency of use of PPV, by household income, January 2013-March 2014
- Figure 14: Frequency of use of PPV, by age, January 2013-March 2014
- VOD use is growing, but opportunity remains with middle-income subscribers
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- Figure 15: Access to VOD, July 2009-March 2014
- Figure 16: Frequency of use of VOD, July 2009-March 2014
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- Figure 17: Access to VOD, by household income, January 2013-March 2014
- DVR adoption highest among high-income households
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- Figure 18: DVR penetration, July 2009-March 2014
- Figure 19: DVR penetration, by household income, January 2013-March 2014
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- Figure 20: DVR penetration, by age, January 2013-March 2014
- Higher-income households spend more
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- Figure 21: Monthly spend, by household income, July 2014
- Figure 22: Pay TV subscription, by household income, July 2014
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- Figure 23: Home phone subscription, by household income, July 2014
- Figure 24: Frequency of use of VOD, by household income, January 2013-March 2014
- Youngest and oldest adults forgo TV
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- Figure 25: Monthly spend, by age, July 2014
- Figure 26: Pay TV subscription, by age, July 2014
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- Figure 27: Home phone subscription, by age, July 2014
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- Figure 28: Frequency of use of VOD, by age, January 2013-March 2014
Leading Companies
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- Key points
- Top five providers could become top three
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- Figure 29: Home service providers, July 2014
- Pay TV: Comcast and DIRECTV lead
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- Figure 30: Pay TV residential subscribers by leading service providers, 2013-2014
- Home phone: Legacy carriers maintain high voice penetration
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- Figure 31: Voice residential subscribers by leading service providers, 2013-2014
- Home internet: Cable gains share
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- Figure 32: Residential internet subscribers by leading service providers, 2013-2014
- Subscribers aged 25-44 prefer AT&T and Verizon
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- Figure 33: Pay TV, home phone, or home internet service subscription provider, by age, July 2014
- AT&T and Verizon do best with higher-income households
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- Figure 34: Home communications providers, by household income, July 2014
Marketing Strategies
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- TV ads
- DIRECTV Movers Deal
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- Figure 35: DIRECTV Movers Deal collateral, September 2014
- Squaring off against churn
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- Figure 36: DIRECTV Starting Over TV ad, August 2014
- DISH gives Perks
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- Figure 37: DISH on demand collateral, September 2014
- Alton Brown touts Perks
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- Figure 38: DISH Perks Smart Choices TV ad, May 2014
- Verizon FiOS SpeedMatch
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- Figure 39: Verizon FiOS upload speed collateral, September 2014
- Faster uploads for everyone
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- Figure 40: Verizon SpeedMatch TV ad, September 2014
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- Figure 41: Verizon free speed upgrade collateral, September 2014
- TWC keeps service and internet quick
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- Figure 42: TWC Ray Donovan Interruption TV ad, July 2014
- XFINITY: Get Your Geek On
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- Figure 43: XFINITY TV ad, August 2014
- U-verse sells GigaPower
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- Figure 44: AT&T GigaPower with Dale Watson TV ad, August 2014
- U-verse takes a bite out of cable
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- Figure 45: AT&T vampire TV ad, June 2014
- Direct marketing
- XFINITY
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- Figure 46: XFINITY bilingual direct marketing collateral, September 2013
- Cox
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- Figure 47: Cox bilingual direct marketing collateral, April 2014
- DISH Latino
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- Figure 48: Bilingual direct marketing collateral, March 2014
- DIRECTV
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- Figure 49: DIRECTV bilingual direct marketing collateral, September 2013
- TWC
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- Figure 50: TWC bilingual direct marketing collateral, February 2014
- FiOS
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- Figure 51: FiOS bilingual direct marketing collateral, February 2014
- Figure 52: FiOS bilingual direct marketing collateral, January 2014
Innovations and Innovators
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- OTT pay TV service
- STBs and apps
- TWC
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- Figure 53: TWC TV app collateral, September 2014
- XFINITY
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- Figure 54: X1 Remote control app collateral, September 2014
- DISH
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- Figure 55: DISH Hopper, September 2014
- DIRECTV
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- Figure 56: DIRECTV GenieGo, September 2014
Bundling and ARPU
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- Key points
- Bundles rising
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- Figure 57: Subscription to bundled services, July 2009-March 2014
- Phone service priced for retention
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- Figure 58: Mean monthly spend on home communication services, by types of subscriptions, July 2014
- Bundles favored by higher-income groups
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- Figure 59: Subscription to bundled services, by household income, August 2013-March 2014
- Bundling cellular for stickiness
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- Figure 60: Interest in cell phone bundling, by age, July 2014
- Multiple-subscription households more keen on cell service bundles
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- Figure 61: Interest in cell phone bundling, by type of current subscriptions, July 2014
Pay TV
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- Key points
- Subscription and intent to change service
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- Figure 62: Pay TV subscription, July 2014
- Silent minority: Unhappy but not ready for change
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- Figure 63: Attitudes and behavior related to changing pay TV service, July 2014
- Older may be wiser
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- Figure 64: Attitudes and behavior related to changing pay TV service, by age, July 2014
- Reasons for not subscribing
- Price tops online offerings
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- Figure 65: Reasons for not subscribing to pay TV service, July 2014
- Fighting the antenna for older age groups
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- Figure 66: Reasons for not subscribing to pay TV service, by age, July 2014
Home Internet
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- Key points
- Usage and subscription
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- Figure 67: Home internet usage, by household income, January 2013-March 2014
- Sizable gaps among 25-64s
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- Figure 68: Home internet usage, by age, January 2013-March 2014
- Service largely satisfies
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- Figure 69: Satisfaction with and concerns about current internet service, by age, July 2014
Home Phone
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- Key points
- Cord-cutting rampant
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- Figure 70: Home phone subscription, July 2014
- Older age groups more likely to have changed service
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- Figure 71: Switched phone service in past 12 months, by age, January 2013-March 2014
- Spend on the decline
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- Figure 72: Spend on phone service, July 2009-March 2014
- Fax machines still common among 45-74s
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- Figure 73: Fax machine penetration, by age, January 2013-March 2014
- Faxing favored by high-income groups
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- Figure 74: Fax machine penetration, by household income, January 2013-March 2014
- Faxing on the decline
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- Figure 75: Fax machine penetration, July 2009-March 2014
Impact of Race and Hispanic Origin
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- Key points
- Subscription and usage
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- Figure 76: Subscription, usage, and access to home communication services, by race/Hispanic origin, August 2013-March 2014
- Blacks give a thumbs up to premium channels/HBO
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- Figure 77: Subscription to premium channels, by race/Hispanic origin, August 2013-March 2014
Appendix – Additional Data Tables
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- Bundled service
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- Figure 78: Penetration for bundled services, by age, August 2013-March 2014
- Figure 79: Interest in cell phone bundling, by household income, July 2014
- Figure 80: Interest in cell phone bundling, by race and Hispanic origin, July 2014
- Phone service
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- Figure 81: Home phone subscription, by age, July 2014
- Figure 82: Home phone subscription, by race and Hispanic origin, July 2014
- Figure 83: Phone equipment ownership, July 2009-March 2014
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- Figure 84: Phone service, by age, August 2013-March 2014
- Figure 85: Phone service, by race/Hispanic origin, August 2013-March 2014
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- Figure 86: Phone service, by household income, August 2013-March 2014
- Figure 87: Spend on phone service, by age, August 2013-March 2014
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- Figure 88: Spend on phone service, by race/Hispanic origin, August 2013-March 2014
- Figure 89: Spend on phone service, by household income, August 2013-March 2014
- Pay TV service
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- Figure 90: Pay TV subscription, by age, July 2014
- Figure 91: Pay TV subscription, by race and Hispanic origin, July 2014
- Premium TV services
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- Figure 92: Subscription to premium channels, by age, August 2013-March 2014
- Figure 93: Access to VOD, by age, August 2013-March 2014
- Figure 94: Access to VOD, by race/Hispanic origin, August 2013-March 2014
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- Figure 95: Access to VOD, by household income, August 2013-March 2014
- Figure 96: Type of VOD programming watched, by age, August 2013-March 2014
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- Figure 97: Type of VOD programming watched, by race/Hispanic origin, August 2013-March 2014
- Figure 98: Type of VOD programming watched, by household income, August 2013-March 2014
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- Figure 99: Frequency of use of VOD, by age, August 2013-March 2014
- Figure 100: Frequency of use of VOD, by race/Hispanic origin, August 2013-March 2014
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- Figure 101: Frequency of use of VOD, by household income, August 2013-March 2014
- Figure 102: DVR penetration, by age, August 2013-March 2014
- Leading companies
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- Figure 103: Pay TV service provider, by age, July 2014
- Figure 104: Pay TV service provider, by household income, July 2014
- Figure 105: Pay TV service provider, by race and Hispanic origin, July 2014
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- Figure 106: Home phone service provider, by age, July 2014
- Figure 107: Home phone service provider, by household income, July 2014
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- Figure 108: Home phone service provider, by race and Hispanic origin, July 2014
- Figure 109: Home internet service provider, by age, July 2014
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- Figure 110: Home internet service provider, by household income, July 2014
- Figure 111: Home internet service provider, by race and Hispanic origin, July 2014
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- Figure 112: Pay TV, home phone, or home internet service provider, by race and Hispanic origin, July 2014
- Attitudes toward internet service
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- Figure 113: Attitudes toward internet service, by household income, July 2014
- Figure 114: Attitudes toward internet service, by race and Hispanic origin, July 2014
- Attitudes toward TV service
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- Figure 115: Attitudes and behavior related to changing pay TV service, by household income, July 2014
- Reasons for not subscribing to TV service
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- Figure 116: Reasons for not subscribing to pay TV service, by household income, July 2014
Appendix – Trade Associations
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