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Parks Associates: Supplemental Value-Added Services to Drive Revenue Growth in Bundled Services

Posted on: Thursday, 18 May 2006, 12:00 CDT

The addition of incremental value-added services, such as TV-based caller ID and home monitoring, to basic triple-play service bundles in the U.S. will boost monthly revenue per subscriber to $206 by 2010, according to Parks Associates' The Business of Bundled Services: Consumers, Models, and Uptake. By definition, a bundle features any combination of landline voice, wireless voice, high-speed Internet, or television from a single service provider. Current revenue per subscriber from triple-play bundled services is $148 per month.

"The bundled services market is becoming increasingly crowded with service providers, including cable MSOs and telcos, all offering similar combinations to consumers," said Deepa Iyer, research analyst at Parks Associates. "At present, competitors are struggling to differentiate beyond aggressive price cuts and catchy promotions. At the same time, customers place a premium on specific value-added services, so naturally broadband carriers are going to use these features as key competitive differentiators."

While the market for value-added television and high-speed Internet services is in an early stage of development, such services will serve as entry points for providers to create "consumer-centric" user experiences. The Business of Bundled Services: Consumers, Models, and Uptake finds that 31% of broadband consumers intend to add TV-related value-added services to their bundle. Furthermore, 41% of broadband consumers are interested in adding supplementary services to their Internet subscriptions as a part of their bundled service package. Parks Associates estimates this interest will intensify in the next five years and these supplemental services will generate $10.7 billion in revenues by 2010.

"An integrated set of services that match consumer interests can transform the so-called commodity services -- voice, high-speed data, and TV -- into enhanced user experiences," Iyer said. "While simple services like caller ID on a TV or a discounted satellite radio subscription will start the transition to 'My World' user experiences, enhanced value-adds such as home monitoring via the TV or online storage backup solutions for consumer-generated content will augment this new value proposition for consumers."

The Business of Bundled Services: Consumers, Models, and Uptake analyzes the changing dynamics of the bundled services market. The report offers insight into ideal service mixes, customer groups, and emerging models for bundled services. It provides guidance to service and value-added solutions providers to design and execute better market strategies that maximize ARPU and increase customer retention. For additional information about The Business of Bundled Services: Consumers, Models, and Uptake, visit http://www.parksassociates.com or contact 972-490-1113 or sales@parksassociates.com.

About Parks Associates: Parks Associates is a market research and consulting firm focused on all product and service segments that are "digital" or provide connectivity within the home. The company's expertise includes home networks, digital entertainment, consumer electronics, broadband and Internet services, and home systems.

Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, multiclient studies, consumer research, workshops, and custom-tailored client solutions. Parks Associates also hosts multiple fall events and co-hosts CONNECTIONS(TM) (in partnership with the Consumer Electronics Association) each year. www.parksassociates.com

Source: Business Wire

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