Life in the Slow Lane is Just Fine

Nearly three-quarters of the dial-up Internet subscribers in the United States are content with the quality of their Internet service, which is bad news for high-speed providers trying to convince consumers to switch to broadband.

According to a Parks Associates survey of 2,500 U.S. households done in July 2001, almost 75 percent of the 46 million dial-up Internet subscribers in the United States are content with the quality of their Internet service.

“The greater part of new broadband subscribers in the next few years will be households currently using dial-up or narrowband Internet service,” said Michael Greeson, senior analyst and director of broadband research for Parks Associates. “Broadband service providers are banking on an increasing number of these subscribers becoming frustrated with dial-up service, which makes broadband seem more compelling. But if dial-up customers remain pleased with the quality of Internet service at $15 to $25 per month, providers are going to have a tough time selling broadband at $45 to $50 per month.”

Many broadband marketing campaigns are touting the ability of high-speed Internet access to view rich media content or make downloads quicker. But the main reason cited by narrowband users not intending to upgrade to broadband is that dial-up is “good enough” for their Internet needs.

Satisfaction of Dial-Up Users
Very satisfied 29.1%
Moderately satisfied 19.0%
Somewhat satisfied 23.2%
Neutral 10.9%
Somewhat dissatisfied 8.4%
Moderately dissatisfied 3.9%
Not at all satisfied 3.7%
Source: Parks Associates

It remains to be seen if consumers who find dial-up to be just fine can be converted. According to research by Jupiter Media Metrix, more than 40 percent of the U.S. online households will be accessing the Net at high speeds by 2006. In 2000, only 9 percent had broadband.

While it’s possible that the dial-up loyalists use the Internet sparingly, for email and some Web surfing, they may need more exposure to broadband’s benefits before they will consider switching. Once the switch to broadband is made, research has shown there is a noticeable difference in consumer Internet use.

Jupiter’s study found broadband consumers use their connections more intensively than narrowband consumers. The most significant disparities occur in entertainment and financial services areas. Jupiter found broadband users are more likely to download music (46 percent of broadband users vs. 26 percent of dial-up users), listen to music (48 percent vs. 30 percent) and watch video (36 percent vs. 18 percent). More broadband consumers conduct personal banking (48 percent vs. 30 percent) and stock-related activities online (35 percent vs. 23 percent) than dial-up consumers.

Although email and surfing the Web remain the top two daily activities among both dial-up and high-speed ISP subscribers, J.D. Power found that high-speed subscribers tend to spend more time online than their dial-up counterparts. On average, dial-up ISP respondents report personally spending about 13 hours per week online, with their households spending about 18 hours in aggregate. However, high-speed respondents report personally spending about 16 hours per week online, with others in their households spending about 23 hours per week online.

Among current dial-up subscribers surveyed by J.D. Power, 10 percent said they are “extremely” or “very likely” to switch to a DSL and/or cable modem connection in the next six months.

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