Consumers resist additional service fees from diverse providers

Hollywood has another reason to embrace the Internet as a digital distribution platform for entertainment.

Over 650 million households worldwide will have broadband access and over 430 million will have a data network by the end of 2013, according to Parks Associates.

That’s resulting in accumulating digital dollars for service and entertainment providers.

U.S. revenues from IP-connected home service bundles will reach $780 million in 2013 and $1 billion in 2014, Parks Associates said. It also found:

•71% of smartphone owners have at least one paid app installed on their phone.

•Tablet owners watch six hours of video on the device per week.

•90% of pay TV customers in North America have access to TV Everywhere.

•Just 10% of U.S. broadband households want to rent and watch video through a social networking site.

•Roughly 20% of U.S. broadband users watched video on a mobile phone in the past 30 days.

While the number of households with broadband is massive and demand for new technologies and devices is strong, Parks Associates stressed that “consumers are reluctant to incur additional service fees, especially as they receive multiple offerings from many different providers,” it said in a report released at the Consumer Electronics Show in Las Vegas this week.

“In our research, we are seeing consumers demand a clear value proposition on core functions before they start adding additional features,” said Stuart Sikes, president, Parks Associates. “For example, connected cars represent a key area of growth and a hot topic at CES.

“Approximately one-third of U.S. car owners have in-vehicle connectivity, but our research shows the most popular apps relate to navigation and vehicle performance. To remain competitive, service providers and CE manufacturers must ensure their core offerings remain relevant to the connected consumer.”

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