Bundled Services Gain Momentum
Bundled phone, Internet, and TV packages increase stickiness and make consumers less likely to jump to a competitive service.
Bundle packages that offer phone, Internet, and TV services are becoming the norm for many households according to “Cable and DBS: Competing for Customers 2006,” a report from Leichtman Research Group.
Consumers subscribing to bundled services are less likely to switch to an alternate service provider. Seven percent of bundle subscribers with cable TV in their service package say they will consider switching in the next six months. Of those who subscribe to cable independently of other services, 12 percent are likely to switch in that time.
Cable also acts as a conduit to bundled services. Eighty-eight percent of cable Internet subscribers receive the service bundled with cable TV. Forty-eight percent of DSL subscribers also subscribe to cable TV services in areas where cable is available.
In a recent Ipsos Insight report, bundles were suggested as a way to increase Internet subscriptions in parts of Europe, with triple-play promotions driving growth.
Forty-three percent of consumer households subscribe to bundled services, up from 33 percent of households last year. Fifty-eight percent of households with annual incomes over $75,000 subscribe to bundles. Comparatively, 34 percent of households with incomes below $50,000 do the same.
Age also plays a factor in preferences for subscription packages. Forty-seven percent of individuals ages 18 to 54 receive multiple services packaged by one company. Fewer households run by those over 55 buy into bundled services; 32 percent take part in those offerings.
The data are derived from a telephone survey of 1,600 randomly selected households from throughout the U.S.
