Four out of ten dial-up subscribers in the US are considering switching to broadband, according to a new report from Horowitz Associates.
By the end of March it is estimated that 31% of American homes had a broadband internet connection, up from 21% a year earlier (see
US Broadband Reaches 30m, But Growth Looks Set To Slow). Horowitz claims that High Speed Data (HSD) Providers have tapped into a key market of enthusiastic net users who value speed, “always on” capabilities and not having to tie up the phone line to access the internet. Applications, content and price-point tiers are seen as key attractions in the second wave of broadband adoption.
Survey results show that 40% of dial-up customers are interested in upgrading to high speed services and broadband penetration could soon reach 54% of all internet homes.
“Unlike the early days of cable, the market for HSD is competitive at the outset,” said Howard Horowitz, president of Horowitz Associates. “New applications and premium content will be crucial for attracting and retaining consumers in a competitive environment.”
Service options It transpires that a significant proportion of broadband internet customers are willing to pay more to access premium content such as streaming and downloadable music and video, news, sports and content for children.
Two-fifths of current HSD subscribers expressed an interest in at least one premium content service covered in the survey and approximately one in four would pay extra for access to a bundle of premium of content. Interest in premium content is particularly high among 18-34 year old broadband subscribers, and among households with children.
Cost remains one of the main barriers to mass market broadband adoption (see Forecasts) but a solution lies in the shape of tiered services. Consumers would be able to select the level of service they required, with op based on speed, bytes and game capabilities, and pay the requisite fee. Almost half (45%) of those considering high-speed internet access are interested in some type of tiered service, with 18% willing to pay more for higher capacity tiers and 14% choosing to pay less for a lower tier service.
High-speed growth In a separate study this week, Nielsen//NetRatings said that 39 million Americans, 13% of the population, now connect to the internet via broadband. Home broadband users grew 49% between May 2002 and May 2003, while narrowband users declined 12% to 69.6 million.
“We’re seeing the mainstreaming of broadband as more and more modern users migrate to high-speed, especially as broadband costs continue to drop,” said Marc Ryan, director of analysis, Nielsen//NetRatings. “Clearly people are discovering the perks of high-speed access from streaming video and audio to rich media.”
