Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Data for this report
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- BCS share of consumer communications dollars rising rapidly
- IM, online video and wireless broadband share market
- Cell phone and subscription television carry 43% of communications sales
- Consumers still selecting based on cost
- Vast majority prefer a single bill
- Quadruple plays poised for growth
- More bandwidth, please
- Transition from analog to digital to increase demand for HD
- Comcast aiming to rule through content
- Ads still focused on standalone service
- Spend higher among minority groups online
- Substantial interest in video chatting
- Market Size and Forecast
- Penetration for BCS rose from 25% to 32% in 2007
- Figure 1: Sales of consumer communication service, at current prices,
2003-11
- Figure 2: Sales of consumer communication service, at inflation adjusted
prices*, 2003-11
- Competitive Context: Internet Telephony
- Instant messaging provides multi-content, multi-user communication
- Figure 3: U.S. Top five online subcategories ranked by usage, May 2007
- Figure 4: Fastest-growing U.S. IM providers, August 2006-June 2007
- Instant messenger players
- Figure 5: Most popular instant messaging services among teens and
adults, November 2007
- AIM/AOL
- Yahoo! Messenger
- Voice over Internet Protocol (VoIP) allows real-time voice chats
- VoIP players
- Figure 6: Revenues and subscribers for Skype and Vonage, 2006 and 2007
- Vonage
- Skype
- Competitive Context: Online Video
- Over half of all Americans now watch online video
- Figure 7: U.S. Online video viewers, 2006-2012 (millions)
- Online video is portable, interactive
- Online video content is bite-sized, not full-length
- Figure 8: Types of online video content U.S. users watch monthly or more
frequently, February 2007
- Netflix bypasses PCs, connects directly to televisions
- 18-24s lead the way and provide a glimpse of the future
- Figure 9: Ownership of device for watching online video on the home
television, by age, January 2008
- Figure 10: Interest in complete "on-demand" programming, by age, January
2008
- Figure 11: Interest in viewing online video on the home TV, January 2008
- Competitive Context: Wireless Broadband
- Wireless broadband gaining traction
- Figure 12: Intent to purchase wireless broadband, by household income,
March 2008
- Figure 13: Intent to purchase wireless broadband, by age, March 2008
- Verizon Wireless BroadbandAccess
- T-Mobile Hotspot
- Sprint Nextel Broadband Network
- AT&T Broadband Connect
- Segment Performance Overview
- Verizon and AT&T have the advantage going forward
- Figure 14: U.S. sales and forecast of consumer communication services,
at current prices, by segment, 2003-11
- Figure 15: Sales of communication services, by segment, 2005 and 2007
- Segment Performance--Cell Phone
- Quadruple plays and cell phone bundles
- Figure 16: Factors that would influence U.S. Internet users to purchase
mobile phone service from their fixed-line communications provider, April
2008
- Add-ons
- Cell phone subscriptions and sales
- Shortage of family plans in bundles
- Figure 17: Cell phone penetration, plan type, and spend, 2003-07
- Figure 18: U.S. Cell phone subscriptions, 2002-07
- Figure 19: Sales of cellular services, at current prices, 2003-11
- Figure 20: Sales of cellular services, at inflation adjusted 2007
prices, 2003-11
- Segment Performance--Internet Service
- Overview
- Exclusive content
- Subscriptions and sales
- Figure 21: Households with Internet subscriptions, 2003-07
- Figure 22: Sales of home Internet services, at current prices, 2003-11
- Figure 23: Sales of home Internet service, at inflation adjusted 2007
prices, 2003-11
- Segment Performance--Pay TV
- Introduction
- DVR service headed toward becoming a standard feature
- Premium content features
- HD
- Sales
- Figure 24: Sales of subscription TV service, at current prices, 2003-11
- Figure 25: Sales of subscription TV service, at inflation adjusted 2007
prices*, 2003-11
- Subscriptions
- Figure 26: Subscriptions and arpu to satellite and cable pay television
services, 2002-07
- Segment Performance--Landline
- Sales and subscriptions in decline
- Consumers like having a back-up communication system for emergency usage
- Leaders' subscriptions falling with segment as a whole
- Figure 27: Sales of home landline service, at current prices, 2003-11
- Figure 28: Sales of home landline service, at inflation adjusted 2007
prices*, 2003-11
- Market Drivers
- Introductory promotions
- Figure 29: Introductory promotional rates for triple play bundles, May
2008
- The convenience of a single bill
- Figure 30: Annoyance with multiple bills, by age and household income,
March 2008
- The need for speed
- Figure 31: Interest in high-speed Internet, by age, March 2008
- Figure 32: Interest in high-speed Internet, by household income, March
2008
- Limited awareness of speed differences
- Figure 33: Awareness of differences in speed betweend DSL and cable
Internet, by age, March 2008
- On Demand media
- HD content and the end of analog transmissions
- Content partnerships may prevent commoditization
- Portable Internet platforms can jeopardize sales
- Growth of laptops may alter how consumers use media in the home
- Figure 34: Laptop vs. desktop households, 2003-07
- Security remains a central concern
- Figure 35: Concern over e-mail spam and Internet security, by age, March
2008
- Brand Differentiation
- Satellite operators offer more HD channels-- for now
- AT&T stands out with ethnic programming
- Comcast dominates content in niche offerings, volume
- Cell phone providers have the edge, partnerships needed to counter
- DISH the lowest-cost provider
- Difficulty with brand differentiation continues
- Figure 36: Perceived differences between subscription television
providers, by age, March 2008
- Leading Phone Companies
- Company subscriptions and sales
- Figure 37: Cell phone subscriptions, AT&T and Verizon, 2005 and 2007
- Figure 38: Total U.S. sales (cellular and other) for AT&T and Verizon,
2005 and 2007
- AT&T
- Verizon
- Qwest
- Figure 39: Qwest U.S. revenue, 2004-07
- Leading Companies--Pay TV
- Company subscriptions and sales
- Figure 40: U.S. Pay TV subscriptions for leading satellite and cable
operators, 2005 and 2007
- Figure 41: U.S. Pay TV revenue for leading satellite and cable
operators, 2005 and 2007
- Comcast Corporation
- DirecTV
- Time Warner Cable
- Figure 42: TWC U.S. revenue for subscription TV, Internet, and landline
services, 2005-07
- DISH Network
- Innovation and Innovators
- Partnering with next-generation student dorms
- Providing content the same day as the DVD release
- Comcast-Facebook alliance targets young adult market
- Advertising
- Ad spend on bundled products rose 466% from 2005 to 2006
- Figure 43: Ad spend on leading communication brands, 2005-06
- Figure 44: Ad spend on BCS products, 2005-06
- Battling for HD dominance
- Figure 45: AT&T television ad, 2007
- Figure 46: Comcast television ad, 2007
- Cell phone carriers face off against cable
- Figure 47: AT&T television ad, 2007
- Figure 48: Verizon television ad, 2007
- Consumers courted with freebies, rebates
- Figure 49: television ad, 2007
- Figure 50: Comcast "free Internet" television ad, 2007
- Young consumers targeted with irreverent humor
- Figure 51: Comcast "jabberwatchy" television ad, 2007
- Figure 52: Comcast television ad, 2007
- Spend on Communication Services
- Average spend up 9% from February 2007 -- March 2008
- Figure 53: Average monthly spend on consumer communications (pay TV,
home Internet, home and cell phone), by age, household income, and presence
of children, March 2008
- Quadruple plays report similar spend as triple plays
- Figure 54: Mean monthly price for telecom services and bundles, by type
of service, March 2008
- Penetration for Bundled Services
- Penetration for BCS rose from 25% to 32% in 2007
- Subscriptions in online sample tend to trend upwards with age, income
- Figure 55: Populations without cell phone, home Internet, landline, or
subscription television services, by age, household income, and presence of
children, March 2008
- Penetration for bundled services in online sample
- Figure 56: Use of bundled services, segmented by type of service, by
age, household income, and presence of children, March 2008
- Who Selects the Service Provider?
- Under-25s less likely to select service
- Figure 57: Main person in selecting service, by type of service, and
age, March 2008
- Reasons for Not Subscribing to a Bundled Plan
- Figure 58: Reasons for not having a bundled service, March 2008
- Figure 59: Reasons for not having a bundled service, by age, March 2008
- Figure 60: Reasons for not having a bundled service, by household
income, March 2008
- Motivation for Switching Service
- Cost is king
- Young and old alike feel need for speed
- Older users more resistant to change
- Figure 61: Factors that may motivate a change in service, by age, March
2008
- Interest in Video Conferencing
- Those who try it like it
- Figure 62: Interest in and experience of video conferencing, by gender,
age, household income, and presence of children, March 2008
- Minority Groups Online Keen on Tech
- Figure 63: Average monthly spend on telecom, by race/ethncity, March 2008
- Figure 64: Interest in and experience of video conferencing, by
race/ethnicity, March 2008
- Figure 65: Factors that may motivate a change in service, by
race/ethnicity, March 2008
- Figure 66: Interest in security and speed, among early adopter consumer
group, March 2008
- Appendix: More on VoIP
- Open VoIP the likely eventual solution for home telephony
- PC to PC calling
- PC to Phone calling
- Phone to Phone calling
- Appendix: Trade Associations
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