There is no question that the global meltdown has started affecting the spending pattern of consumers in all markets. The change in spending is on account of several factors such as job cuts, anticipated less growth in income in the future and a lack of availability of credit from financial institutions.
Though the U.S. is the world’s largest economy, American consumers have begun altering their spending habits especially on entertainment spending outside the home. This means the U.S. is emerging as a potential market for broadband, communications, and entertainment providers offering customer support, self-diagnostic, and troubleshooting solutions because consumers are cutting spend on outside sources and creating dependence on at-home entertainment services.
This is the latest research finding from Parks Associates
, an international research firm, which said that almost 66 percent of U.S. consumers have changed their spending habits in the last quarter of 2008.
While the U.S. is one of the major markets for entertainment services, the changes in spending pattern have the greatest impact on entertainment spending outside the home.
"For household services such as Internet and pay TV, recessionary concerns have less impact," said Kurt Scherf, vice president, principal analyst, ParksAssociates. "Consumers are more likely to cut back on outside entertainment expenses before trimming household services such as home telephone, pay TV, and Internet."
According to a survey conducted by the firm, U.S. consumers are likely to cut their spending on dining-out, travel, and out-of-home entertainment and nearly 50 percent indicate that they will be spending less on consumer electronics because of poor economic conditions.
Parks Associates advises entertainment service providers to take a new look at their approaches to revenue growth and cost savings. By utilizing self-diagnostic and trouble shooting solutions and building remote support capabilities, service providers can turn customer support from a liability into an opportunity, reducing OPEX (News
) costs initially and growing revenue-generating customer support businesses in the long term.