Report: Multiplay Customers Half as Likely to Drop Digital TV Service

A new report published by Strategy Analytics, “How Vulnerable is the Bundle? Economic Effects on US Residential Multiplay Spend,” indicates that households subscribing to two or more “multiplay” services are half as likely as unbundled consumers to drop their digital television service.


The report examined the impact of the economy on consumer spend intentions, prioritization of individual bundle components, and bundling’s “insulating” effect.

 

The report is based on surveys fielded in June 2009, and estimates consumer attitudes towards their current economic situation, outlook for the future, past, current and future home entertainment and communications spend intentions, and prioritization of individual multiplay bundle components.

“Multiplay services—and particularly broadband—have fared remarkably well over the past year, in spite of the troubled economy,” said David Mercer, vice-president of the Strategy Analytics (News - Alert) Digital Consumer Practice, in a release. “Our survey findings indicate that these services are seen by many as indispensable.”

 

As per the findings, unbundled pay digital television consumers were over two times more likely to drop their digital television service than bundled customers; 18 percent more bundled customers than unbundled would leave their digital television service unchanged, due to the need to scale back household spending. Unbundled broadband customers were also twice as likely as standalone or non-bundled customers to drop their service altogether.

 

However, the report also revealed that fixed telephone service failed to benefit from the same protective effect of bundling, with roughly identical numbers of bundled and unbundled consumers saying they would drop the service completely.

 

“While bundling does have a certain ‘insulating’ property against churn, it is by no means a panacea—nor does it apply evenly across the board for all services,” said Ben Piper, analyst and director of the Multiplay Market Dynamics service.

 

Part of the research also included questioning on the spending intentions for the upcoming year, for which over 80 percent of respondents said they did not intend to make any dramatic changes in spite of the slowdown.