Wednesday, April 01, 2020

Consumers' Dependence on Broadband Gives Comcast a Streaming Opportunity

Most Americans would likely agree that access to high-speed internet makes life much easier and more enjoyable. Technology market research firm Parks Associates has quantified the gut feeling. As of last year's third quarter, 76% of the U.S. broadband customers it surveyed indicated it "would be difficult" to lose access to their broadband service. The research outfit suspects the figure has grown further in the meantime in the wake of the coronavirus outbreak that's stranded millions of people at home.

However, that's not the most noteworthy detail of the Parks Associates report for Charter and Comcast shareholders. Curiously, only about one-fifth of those internet users questioned subscribe to a streaming video service from their internet service provider, and only another fifth of those broadband users know whether their internet service provider even offers a streaming option.

Parks Associates Director of Research Steve Nason explained the findings this way:

Consumers with OTT subscriptions are shifting away from internet bundles, with this group much more likely to have stand-alone internet service than non-subscribers. This finding indicates providers need to adjust their bundling strategies, to include more OTT video services as options. Currently, less than one-fifth of subscribers receive an OTT service bundled with their broadband package.

Both Charter -- which owns Spectrum -- and Comcast are stingy about sharing data that would support Parks Associates' findings. Given the data the two cable giants are willing to provide, however, the numbers aren't difficult to believe. More than 40% of Charter's customers only subscribe to one of its services, and broadband is by far its most popular offering. Comcast also sports more broadband subscribers than cable or voice, and 35% of its customer base is only signed up for one of its services. For both companies, cable headcounts continue to fall while broadband subscriber counts continue to rise.

Since Charter's service is the biggest of only a few broadband providers that offer a home-grown streaming service, Parks Associates' findings are more likely about Charter's ability or willingness to tout its low-cost streaming option.

The Parks Associates figure indicating 76% of customers rate access to the internet as highly important comes as little surprise to most people. This finding may even understate broadband's actual value to consumers. That's why cable companies are right to prioritize it over other services like traditional cable or phone. High-speed internet is a vehicle through which all sorts of other products and services can be sold.

From the article "Consumers' Dependence on Broadband Gives Comcast a Streaming Opportunity" by James Brumley.

Next: The Triple-Play Bundle Is Dead, But This Surprisingly Popular Bundle Just Might Stop Cable Companies' Bleeding
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