A survey of consumer interest in downloading content from broadband services has revealed that consumers will buy bundles of services only when those bundles offer them a discount on individual services and give them an opportunity to personalize their purchases.
CSG Systems Inc., a provider of billing and management system software for broadband services, including video on demand, conducted the survey to design its software to support what service providers will be delivering to consumers. CSG found that its customers will have to be nimble in offering a variety of packaging and discounting options, and billing and customer care providers have to give the flexibility to support that variety.
The survey was conducted by InfoSurv Inc., an online survey company specializing in market research. It asked consumers what network services they purchased, such as landline phone, cable TV, satellite TV, Internet and mobile phone, and where they purchased services. It also asked about buyers experiences, particularly with advanced services, such as video on demand, where services are downloaded.
Among the findings, only about one-third of consumers who buy more than one service are buying them from the same provider. Consumers said they would buy from one provider, first if there was a discount and, second, if they had the ability to personalize services. Only 12 percent want to see things on single bill as a reason to buy from one provider, says Will Rotch, CTO of CSG Systems, who spearheaded the study.
Asking about buying habits, the survey found that only 40 percent of respondents had purchased content online, which included buying a pay-per-view movie or an MP3 on the Internet, or even ring tones from a mobile phone provider. Those who did gave high marks for the experience, says Rotch. They were successful and had little trouble doing it. He adds, but not everyone was aware of it, so I think there is an educational issue here.
The study also found that, although 64.5 percent of respondents said they are interested in personalized content, they are not interested in paying much for it. Personalized content is good for enticing them into a bundle, [but] they are not really interested in shelling out for it. We think not more than 5 percent are [willing to pay more].
One example is the specialized sports packages offered on most cable systems. Many said, sure, they were interested but not willing to pay for it, says Rotch. If you say, we will throw in five MP3s for your $29.95, a few more might be interested. Also, buying is not consistent. Those who did use it, did only one or two times a month, Rotch notes.
Also, the results show 3G operators need to be careful about predictions on content sales. A lot of people are licking their chops, like on the mobile side with all this 3G content, says Rotch. But I think to some degree they are getting ahead of themselves. In the long-term picture, there may be some interesting revenue streams, but initially they have to build up value. People are not instantly ready to pay for stuff now.