Table of Contents
Executive Summary
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- Market overview
- Top takeaways
- The issues
- Pay TV cable and satellite subscriptions tumbling
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- Figure 1: Cable and satellite TV subscription, 2010-18
- The value of TV bundles are questioned by subscribers
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- Figure 2: Pay TV behaviors, July 2019
- Pricing and customer service are pain points for consumers
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- Figure 3: Home internet behaviors, by satisfaction with internet and TV bundles – Price and customer service, July 2019
- The opportunities
- Bundling additional services could expand reach and increase revenue
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- Figure 4: Home internet and pay TV satisfaction – Price, by bundled services, July 2019
- Parents, especially fathers likely to return to paid TV
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- Figure 5: Pay TV behaviors, by gender and parental status, July 2019
- Younger higher earning households look for a change
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- Figure 6: Home internet behaviors – Would switch ISPs, by age and household income, July 2019
- What it means
The Market – What You Need to Know
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- Market places priority on internet connection over pay TV content
- Cable providers provide the most home internet connections
- 5G could draw early adopters to wireless ISP providers
Market Size
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- Decline in Pay TV spend point to shifting consumer priorities
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- Figure 7: Revenues from pay TV and home communication services, at current prices, 2014-19
- Figure 8: Revenues from pay TV and home communication services, by segments, at current prices, 2014-19
- Figure 9: Revenues from pay TV and home communication services, by segments, at current prices, 2014-19
Market Breakdown
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- Cable providers are the top ISPs in the US
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- Figure 10: Home internet service provider, November 2017-October 2018
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- Figure 11: Home internet service provider, November 2012-October 2018
Market Perspective
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- Comprehensive 5G coverage could get consumers to drop cable
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- Figure 12: 5G awareness and knowledge, January 2019
- Figure 13: Attitudes toward mobile networks – 5G, by 5G awareness, January 2019
Market Factors
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- Digital video streaming services chip away at TV bundles
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- Figure 14: Number of US OTT services, 2013-March 2019 YTD
- Live internet TV streaming platforms threaten bundles
Key Players – What You Need to Know
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- Verizon Fios a big factor behind fiber adoption in Northeast
- Pay TV packages a casualty in today’s entertainment landscape
- Telecom services expanding operations to both home and wireless
- vMVPDs impact on the bundled TV industry
What’s Working
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- Verizon’s fiber internet prevalent in Northeast states
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- Figure 15: Verizon “Fios" product direct mail volume and spend, by region, January 2018-July 2019
- Figure 16: Verizon Fios direct mail promotion, October 2018
- AT&T brings fiber connections to the South
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- Figure 17: AT&T fiber direct mail, March 2019
- Figure 18: AT&T US fiber coverage map screenshot, August 2019
What’s Struggling
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- Pay TV subscriptions continue to get cut
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- Figure 19: Cable and satellite TV subscriptions, 2010-18
What to Watch
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- Telecoms expand offerings across pay TV, home internet and mobile
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- Figure 20: Xfinity Mobile ad campaigns and ad pieces, April 2017-July 2019
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- Figure 21: Xfinity mobile direct mail, October 2018
- Figure 22: T-Mobile TVision direct mail, May 2019
- Figure 23: T-Mobile home internet direct mail, July 2019
The Consumer – What You Need to Know
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- Cable remains the top home internet provider
- Bundlers a sizeable segment of the market
- Nearly four in 10 consumers would switch ISPs for a better price
- Pay TV services need to offer additional customization
- Customer service remains critical to retention
Home Internet Source
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- Majority of the market has cable based internet
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- Figure 24: Home internet source, July 2019
- Higher earners upgrade to fiber connections, while lower earners use mobile hotspots
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- Figure 25: Home internet source, by household income, July 2019
- Fiber optic connections most prevalent in Northeast and South
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- Figure 26: Home internet source, by geographic area, July 2019
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- Figure 27: AT&T US fiber coverage map screenshot, August 2019
- Younger consumers use less conventional ISPs
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- Figure 28: Home internet source, by age, July 2019
- DSL still plays a prominent role for rural consumers
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- Figure 29: Home internet source, by area, July 2019
Bundled Services
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- More than half bundle pay TV with home internet
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- Figure 30: Services bundled with home internet and paid separately, July 2019
- Older consumers bundle landlines, younger consumers bundle mobile plans
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- Figure 31: Phone services bundled with home internet provider, by age, July 2019
- Younger, wealthier consumers more likely to bundle home security
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- Figure 32: Home security system bundled with home internet provider, by age and household income, July 2019
- Black men look to protect their home and property
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- Figure 33: Home security system bundled with home internet provider, by gender and race/Hispanic origin, July 2019
- Bundling mobile services could be an opportunity for growth
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- Figure 34: Mobile phone service and data bundled with home internet provider, by home internet source, July 2019
Home Internet Behaviors
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- Nearly four in 10 would switch ISPs for a better price
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- Figure 35: Home internet behaviors – Switching consideration, July 2019
- Consideration for switching jumps among 25-34 year olds
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- Figure 36: Home internet behaviors – Switching consideration, by age, July 2019
- Consumers 25-34 earning $50K+ most likely to consider switching ISPs
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- Figure 37: Home internet satisfaction switching consideration – CHAID – Tree output, July 2019
- CHAID methodology
- Asian consumers more aware of performance from their ISP
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- Figure 38: Home internet behaviors – Awareness, by race and Hispanic origin, July 2019
- Black consumers more willing to upgrade with their current ISP
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- Figure 39: Home internet behaviors – Switching considerations, by race and Hispanic origin, July 2019
- Satellite subscribers less likely to switch ISPs
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- Figure 40: Home internet behaviors – Switching considerations, by home internet source, July 2019
Pay TV Behaviors
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- TV subscribers may feel their money is wasted on unwatched channels
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- Figure 41: Pay TV behaviors, July 2019
- Live sports a primary driver for men
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- Figure 42: Pay TV behaviors – Live sports, by gender and age, July 2019
- Figure 43: Hulu Live TV informational email, April 2019
- Fathers more likely to bring the household back to TV
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- Figure 44: Pay TV behaviors – Reconnecting TV, by gender and parental status, July 2019
- Younger women most likely to use other devices while watching TV
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- Figure 45: Pay TV behaviors – Other devices, by gender and age, July 2019
- Younger consumers utilizing pay TV innovations
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- Figure 46: Pay TV behaviors – Innovations, by age, July 2019
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- Figure 47: Xfinity services informational direct mail, June 2019
Home Internet and Pay TV Satisfaction
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- Pricing remains the critical pain point for consumers
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- Figure 48: Home internet and pay TV satisfaction – Bundled internet and TV services, July 2019
- Bundled services must prioritize price and billing
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- Figure 49: Key drivers of pay TV/internet bundle satisfaction, July 2019
- Men more likely to be satisfied with pricing and billing contracts
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- Figure 50: Home internet and pay TV satisfaction – Bundled internet and TV services, by gender, July 2019
- Internet TV picture quality comparable to bundled TV services
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- Figure 51: Internet TV satisfaction, July 2019
- Nonbundlers less satisfied with various features of home internet
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- Figure 52: Home internet satisfaction, July 2019
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- Figure 53: Key drivers of home internet provider satisfaction, July 2019
- Figure 54: Overall home internet and pay TV satisfaction, by home setup, July 2019
- Customer service experience a driver for customer retention
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- Figure 55: Home internet behaviors, by satisfaction with internet and TV bundles – Price and customer service, July 2019
- Bundling on-demand streaming services improves pricing perceptions
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- Figure 56: Home internet and pay TV satisfaction – Pricing, by on-demand streaming service bundlers, July 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Consumer
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- CHAID methodology
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