Parks: 24% of U.S. Broadband Households Likely to Upgrade Service in Next Six Months

In an over-the-top video world, high-speed Internet service is a requisite. Parks Associates Feb. 11 released new data revealing that in Q3 2020, more than 50% of U.S. broadband households reported that their broadband usage had increased since the start of the COVID-19 crisis — which has seen an increase in at-home activities including work and schooling. While consumers report broadband performance is keeping pace with the increased demand, in Q3 2020, 24% of fixed broadband households reported plans to upgrade their speed in the next six months, compared with 18% in Q2 2020.

The largest cable and wireline phone providers in the U.S. — representing about 96% of the market — acquired about 1.53 million new broadband subscribers in Q3 2020, compared with a gain of about 615,000 subscribers in Q3 2019, according to Leichtman Research.

These top broadband providers now account for about 104.9 million subscribers, with top cable companies having about 72 million broadband subscribers, and top wireline phone companies having about 32.9 million subscribers.

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“Broadband upgrade plans indicate many households see some COVID-19-related changes as permanent,” analyst Steve Nason said in a statement. “For video services, OTT service stacking has been particularly pronounced, with 45% of U.S. broadband households subscribing to three or more services. Many consumers are planning to add new services such as Disney+, Apple TV+, HBO Max, and Peacock as a permanent part of their OTT service portfolio, beyond the traditional Netflix, Amazon Prime Video, and Hulu.”

Parks found that the pandemic continues to widen the OTT/pay-TV gap. As many consumers across the U.S. remain homebound, they are continually relying on video content to fill their time outside of work and school. Within video services, COVID-19 has accelerated the trend of video viewers accessing OTT offerings at much higher rates than a pay-TV service via a traditional or online provider.

“Many traditional pay-TV subscribers are migrating to online pay-TV offerings or standalone OTT services,” Nason said. “Traditional providers, who still comprise the majority of the pay-TV market, have to continually seek ways to integrate online video services into their offerings either through homegrown solutions or external partnerships.”

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