Consumer Tidbits from Parks & Associates

Wednesday, July 20, 2005

Viodi View At last week's Parks and Associates’ Experts Analyze the Digital Living Landscape conference, Parks and Associates’ analysts, Kurt Scherf, Harry Wang and Michael Cai, used results from their primary research to illuminate what consumers want from service providers. Scherf has the common sense that one would expect from someone with roots from Iowa and, as such, his presentations and those of his colleagues are not laced with hyperbole, but are tempered with the reality of the challenges of making technology easy to use for the average consumer.

Scherf pointed out that price reductions are working for telcos with regards to picking up broadband market share. Price will be even more important in attracting new customers who are more price sensitive. For instance, 54% of broadband intenders plan on subscribing to the the telcos’ offering versus 29% who profess that they will go with their cable operator. Still, cable is enjoying $40 to $42 average revenue per month per broadband user versus $30 to $33 for telcos.

Because of the challenges and the time consuming nature of what essentially amounts to the construction of a new network, Michael Cai pointed out that broadcast satellite will continue to play a key role in the major telcos’ plans. Bell South, Verizon and SBC have deployed over 1 Million subscribers in the last year. Cai believes that telcos’ satellite partnerships are going to be important for the long-term, as well.

Interestingly, Parks & Associates 2005 survey of 2,084 households indicates that people who have satellite television service pay significantly more for their combination of video, Internet, telephone and mobile telephone than any other segment. The satellite households pay on average $261 per month vs. $217 per month for the next closest segment, the digital cable households.

From the article "Consumer Tidbits from Parks & Associates," by Ken Pyle.