U.S. Internet Households Pay Average of $116 Per Month for Internet

U.S. internet households pay an average of $116 per month for their home internet, including both standalone and bundled internet, according to a new report from Parks Associates, “Quantified Consumer: Fixed vs. Wireless — Consumers’ Shifting Broadband Preferences.”

The report also noted consumer savings of $600 to $1,800 annually should consumers cut their home internet service.

According to the research, there are more than 13.9 million home internet cord-cutters in the United States, a missed revenue opportunity of more than $10.5 billion. Cord-cutters exist for a variety of reasons, according to Parks. Cost and preference for mobility are top triggers, but technical issues and lack of availability also impact their decisions.

“Consumers overall are increasingly concerned with quality over price; however, older households are concerned about costs,” Kristen Hanich, director of research at Parks Associates, said in a statement. “Over 80% of those 65-plus cite cost as a factor for cancelling their home internet, and almost two-thirds of this age group say that they prefer using their mobile internet.”

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While there is some interest in canceling home internet services, consumers are increasingly upgrading to Gigabit speeds and adding on additional value-added services. A growing percentage of consumers are likely to be more concerned with the quality of their home internet service over the price, according to Parks. The pandemic, work at home, and increases in video consumption and video conferencing have all put pressure on networks, highlighting the importance of quality internet to consumers. Currently, half of home internet households receive at least one additional non-traditional service from their ISP.

“Consumer intention to upgrade their home internet service remains at an all-time high,” Hanich said. “ISPs must elevate their value proposition or risk losing their customers to competitors.”

Parks Associates: Home Internet Service Cancellation Triggers

Parks Survey: Consumer Purchases of Sony Smart-TVs Grow

Out of the top five brands, Sony showed clear growth among smart TVs purchased or received in the previous six months compared to 2020, pushing it past Vizio and into the top three for reported purchases in Q3 2021.

That’s according to Parks Associates’ latest update of its Consumer Insights Dashboard, an ongoing service that tracks adoption of consumer electronic devices and services through its quarterly surveys of 10,000 U.S. internet households.

“Samsung continues to lead smart TV adoption, and it currently comprises over one-fourth of all consumers’ primary smart-TVs in the U.S.,” Paul Erickson, director of research for Parks Associates, said in a statement. “While smart-TV adoption is at all-time highs, there may be short-term saturation and conservatism in effect while consumer smart-TV purchasing settles following dramatic increases in 2020. Sony still managed to grow in purchasing — despite downturns for the traditional top three brands — which may be related to its first-mover release of new Google TV Bravia models over 2021.”

Heightened entertainment consumption has driven sustained high purchase intent for connected entertainment devices, according to Parks. Smart-TVs have not only become the most-adopted streaming video device but also the most favored for video consumption. Among survey respondents, 56% own a smart-TV; 73% own a home network router; 39% own a gaming console; and 57% own a desktop computer.

Smart-TVs, along with smart speakers/displays and desktop PCs, experienced growth during the pandemic due to an increase in consumers’ perceived value of these devices, according to Parks. Smart-TVs and smart speakers/displays have shown durability in sustaining growth and are expected to maintain elevated adoption in years to come.

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“This is notable given that the aggregate trend across categories has been a very gradual decline in overall usage since 2017,” Erickson said in a statement. “Smart-TVs have become the most-important media centerpiece for the home, and their prominence offers the industry numerous integration opportunities for smart home and connected health ecosystems.”

Netflix Leads Parks List of 2021 Top 10 U.S. SVOD Services

Netflix topped the list of Parks Associates’ 2021 top 10 U.S. paid subscription over-the-top (OTT) video services.

The list is based on estimated numbers of subscribers through September 2021 from the firm’s OTT Video Market Tracker.

The 2021 list shows the first change in the top three services since the firm started tracking the providers in 2015. Disney+ has moved into the top three, moving ahead of Hulu in number of subscribers. HBO Max moved into the top five, while Paramount+ (rebranded from CBS All Access) jumped to number seven on the list. New entrant Discovery+ is right behind at 11.

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Parks Associates’ 2021 Top 10 U.S. Subscription OTT Video Services (SVOD):

  1. Netflix
  2. Prime Video
  3. Disney+
  4. Hulu
  5. HBO Max
  6. ESPN+
  7. Paramount+
  8. Apple TV+
  9. Starz
  10. Showtime 

 

The research firm reports that, based on quarterly surveys of 10,000 U.S. broadband households, more than 80% of broadband households have at least one OTT service and that the churn rate for OTT services is 44%, with consumers adopting multiple subscriptions and experimenting with different services.

“While the Disney+ content portfolio may have allowed it to leapfrog stablemate Hulu in 2021 rankings, its position reaffirms the collective power of the Disney Bundle triumvirate: Hulu, Disney+ and ESPN+,” Paul Erickson, director of research of Parks Associates, said in a statement. “ViacomCBS’s successful rebrand and content-fueled reformulation of CBS All Access into Paramount+ have allowed it to leapfrog Apple TV+ into seventh place behind ESPN+, and time will tell if the service will break into the top five.”

“Broadband providers added an estimated 6.4 million residential customers to date in 2021, showing rapid growth,” Kristen Hanich, director of research at Parks Associates, said in a statement. “The importance of bundling pay-TV with home broadband is diminishing though — our Home Services Dashboard finds that only 38% of U.S. broadband households bundle pay-TV with their home internet service, a significant decline from past levels.”

The role of online TV continues to grow, with consumers embracing OTT services offered by familiar providers, according to Parks.

“In Q3 2021, 19% of U.S. broadband households reported subscribing to a vMVPD service, nearly double from the previous year,” Eric Sorensen, contributing senior analyst at Parks Associates, said in a statement. “By 2024, the U.S. vMVPD subscriber base will increase to more than 23 million households. All players will continue vying for the leading positions.” 

Parks: Headphones, Earphones See Sales Spike With Work-at-Home, Home Schooling and Entertainment

With more states advising shelter-in-place guidelines during the coronavirus pandemic, new data from Parks Associates finds that 44% of U.S. broadband households own speakers, 37% own headphones bought separately from a phone or music player, and 33% own a separate set of earbuds.

While purchase intentions were flat prior to the COVID-19 outbreak, due in large part to the emergence of smart speakers, demand for headphones and earbuds is projected to see a spike with work-at-home and entertainment-in-place now the standard for many households.

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“Everyone in the household now needs their own headphones and earbuds for privacy during this time of shelter-in-place orders and work-at-home mandates,” research director Steve Nason said in a statement.

Nason contends people buying head/earphones are doing so expecting to integrate these standalone products with their smart speakers and other connected devices in the home. This trend was already underway with the gradual dissolution of the “home theater system” concept, according to Nason, with households now featuring a collection of varied audio products.

“Brands and devices that must work together to deliver a seamless user experience,” he said.

Soundbars are now a prominent standalone product category in the audio device landscape, with adoption at nearly 25% of domestic broadband households, according to Dallas-based Parks. It is the most likely audio device to be connected to the TV, so soundbars have not been as impacted by smart speakers and displays as other audio products. However, growth has remained flat. Adoption of more niche audio devices such as internet-connected audio visual receivers and multiroom music systems has remained low.

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“Prior to the COVID-19 outbreak, the traditional audio device category was at a crossroads,” Nason said. “Adoption and usage of devices such as wired/wireless speakers without voice assistants, audio/visual receivers, home theater systems, and multiroom music systems had waned.”

He said that while consumers are now buying electronics to accommodate work-at-home and home schooling needs, manufacturers need to maintain their emphasis on innovation, particularly the integration with voice assistants, so that their devices can have value beyond the initial stop-gap usage.

Parks notes device manufacturers and voice assistant providers alike have to better market and communicate the value that integrated voice control brings to audio devices.

“Increased integration of audio devices and use of high-resolution and 3D audio with the most-used CE video device, smart TVs, will also raise the profile of the audio category,” Nason said.