As the lines between entertainment and communication converge, more consumers are seeing some wisdom in buying multiple services from a single provider. Consumers are growing increasingly accustomed to purchasing a variety of service packages from providers, such as landline and mobile phone service. Key industry players, sensing opportunity, are rolling out quadruple play packages and will be spending big marketing dollars to attract consumers.
The latest research from Strategy Analytics suggests that about 57% of U.S. households have made the move to buy more than one service from the same provider. Analysts see that the Triple Play – the combination of phone, TV and Internet service will be the dominant package of interest to consumers. But Ben Piper, Director of the Multiplay Market Dynamics at Strategy Analytics, says the trend for some consumers will be to buy into the Quad Play which he notes, “has had a slow start in the U.S., but we see increased momentum over the next five years.” By 2016, the company sees 16% of U.S. households willing to ante up for a Quad Play that includes:
- Fixed Voice
- Mobile Voice
There’s good reason for marketers to pull consumers into these contracts. Piper points to research findings that show consumers who sign up for a Quad Play are ‘significantly less likely to churn.’ And churn, of the loss of subscribers, is a well-known problem as consumers shop around for better rates from a competitor. The other attractive statistic for multiple-play customers is the higher Average Revenue Per Unit (ARPU). Currently, service providers are receiving about $170 a month on an ARPU basis.
While these service providers will have to battle the trend of younger consumers cutting the cord on both fixed voice and pay TV, keep competition is likely to exist in this market for several years to come. And this competition will fuel marketing expenditures.[Source: 13% Quad Play Service Penetration by 2016. Strategyanalytics.com. 2 Aug. 2011. Web. 15 Web. 2011]