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Broadband

Little consumer interest in broadband-only subscription

Monday 5 January 2015 | 14:40 CET | Background

Few Dutch consumers are interested in a 'single play' broadband subscription, according to research by Telecompaper. In a survey in October 2014, only 8 percent said they were very interested in a subscription with only broadband. The figure was 6 percent in August 2013. Around two-thirds said they had no interest. 

The Telecompaper Consumer Panel looked at interest in an internet subscription over fibre, with a download speed of 50 or 100 Mbps, offered at an affordable price. No fixed line or TV service would be included in the package. Such a subscription is aimed at 'cord cutters' - consumers who no longer subscribe to a TV service in favour of online video. This is a small group in the Netherlands, according to the survey. In August 2013, 6 percent of respondents said they were very interested in such a broadband-only offer, 27 percent had some interest and 67 percent had no interest.

 

In October 2014, the figures showed no significant changes. The percentage very interested increased slightly to 7.6 percent, 23 percent had some interest and 69 percent had no interest. 

Children watch TV differently

The survey did find different interest groups within households. Households with children were more interested in a broadband single play, at 10 percent of those surveyed. This may be explained by children and young people watching TV differently than their parents. Young people have a high need for connectivity, know how to find online video content and are less likely to sit in front of the TV at fixed times.

However, the majority of consumers still want a fixed line and TV in their subscription. This was underlined in other research by the Telecompaper Consumer Panel. Most Dutch consumers say they want to have (live) access to the main channels from the NPO, RTL and SBS; the three channel groups were named by 69-79 percent of consumers. Discovery, Animal Planet and National Geographic were also popular (49%), and public broadcasters from neighbouring countries followed at a distance.

Two-thirds (67%) of households also said they use their fixed lines regularly or often. Only 7 percent don't use their fixed number. A passive fixed subscription is becoming more common though, as the figure was only 3 percent in December 2012. 

Cord-cutting: an American trend

In the US, market watchers are already calling cord-cutting a visible trend. In November, the Wall Street Journal reported that a net 179,000 households ended their cable or satellite TV subscription in the third quarter. That's an increase of 83,000 compared to the third quarter of 2013. These figures are still small though, on a total market of more than 100 million TV households. 

The number of OTT video providers continues to increase, as well as the amount of films and series easy to find online. In addition, the cost of equipment to access such content is falling. Providers such as Google, Amazon and Roku offer HDMI sticks that can stream online video direct to the TV set.

Price is often given as a reason for ending TV services. Complete triple-play packages on cable include over 1,000 TV channels and can cost over USD 200 per month in the US. Many households are keeping their subscription, but downgrading to smaller packages. 

Netherlands keeping up with the trends 

The Dutch government has said it considers OTT services to be one of the most important trends on the market for the medium to long term. The emergence of OTT and its extension cord-cutting may create tension between broadcasters and VoD providers on the one hand and providers of fixed broadband and triple-play on the other.

It's currently not possible to take a cable plan without TV, as the analogue service is always included. The Dutch ministry of economic affairs expects the cable operators to stop analogue transmissions eventually, making it at least technically possible to offer broadband only. The government considers it important to have a good OTT offering available, in order to increase choice for consumers. 

This research is based on the Telecompaper Consumer Panel. The survey was conducted in August 2013 among 863 consumers aged 12 to 80 years old. The survey was repeated in October 2014 among 1,498 consumers. For more information about research opportunities with the panel, please contact research@telecompaper.com.



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