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Published by: Mintel International Group Ltd.
Published: Aug. 1, 2007 - 100 Pages
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Consumer data for this report
- Market size and segmentation data
- Forecast factors
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Highlights
- Market maturity nearing
- Consumers becoming more sophisticated about Internet usage
- The impact of a shift to laptops
- The decline of dial-up
- Connectivity advancement
- Trends in advertising and promotion
- The need for speed
- Changing service
- Market Factors
- Drivers and trends
- PC penetration moving slowly and favoring laptops
- Reaching the unconnected
- The PC population that does not use the Internet
- Manufacturer bundling to reach new PC homes
- Reaching new households
- Speed and spend
- A future in fiber
- Expectations for more reliable access
- X-play bundled services offer savings and convenience
- Consolidation of billing
- Figure 1: Multiple-bill dissatisfaction, February 2007
- Entertainment, communication, and other “killer applications” demand higher speed
- Figure 2: Use of the Internet for work and entertainment (games, music, video, and IM), March 2007
- Video telephony
- Competition from free and low-cost commercial and municipal service
- Future trends
- Television: the ultimate killer Internet application
- Competition from 3G and WiMAX
- Cheaper DSL and cable
- Exclusive content and virtual ISPs
- Premium service is reliability
- Security improvement will allow consumers to resell bandwidth
- Figure 3: Concerns over security, February 2007
- Faster DSL and cable
- New pricing paradigms
- Net neutrality
- Market Size and Segmentation
- Subscriptions
- Figure 4: Households with Internet subscriptions, 2003-07
- Figure 5: Households by type of service, and presence of a peronsal computer, 2003-07
- Figure 6: Households by type of service, and presence of a peronsal computer, 2005 and 2007
- Sales
- Figure 7: Total U.S. ISP subscriber revenues, at current and constant prices, 2003-07
- Market forecast
- Figure 8: Forecast of total U.S. ISP subscriber revenues, at current and constant prices, 2007-11
- Market segmentation
- Figure 9: ISP sales, segmented by connection type, 2005 and 2007
- Figure 10: Graph: Forecast of segment share by value, 2012
- Dial-up
- Figure 11: Annual service revenue, dial-up, at current and constant prices, 2003-07
- Cable
- Figure 12: Annual service revenue for cable broadband, at current and constant prices, 2003-07
- DSL
- Figure 13: Annual service revenue, DSL, at current and constant prices, 2002-06
- ISDN, fiber and other
- Figure 14: Annual service revenue, other broadband, at current and constant prices, 2003-07
- Supply Structure
- Introduction
- Figure 15: Supplier share, by subscriptions, 2005-06
- Figure 16: Internet service pricing, May 2007
- Figure 17: Supplier revenues in the U.S., 2005 and 2007
- Cable round-up
- Dial-up roundup
- DSL round-up
- Other broadband roundup
- Cellular providers not yet leveraging full weight
- Figure 18: AT&T mobile + wireless ad
- Advertising and Promotion
- Introduction
- Adspend
- Figure 19: Media expenditures by leading ISPs, 2005 and 2006
- The fight for AOL’s customers—price competition
- PeoplePC
- Figure 20: PeoplePC advertisement
- NetZero
- Figure 21: NetZero advertisement
- Figure 22: NetZero advertisement
- Figure 23: NetZero advertisement
- Capturing the dial-up tone
- Speed competition among other providers
- Competition based on content
- Figure 24: AT&T Yahoo! High Speed Internet advertisement
- Figure 25: AT&T advertisement
- Competition based on security
- Figure 26: Netscape reality television spoof advertisement
- Customer service
- Connection reliability
- Bundled service ads—a step in the wrong direction?
- Figure 27: AT&T with free dish TV for one year advertisement
- Figure 28: Comcast advertisement
- Figure 29: Time Warner advertisement
- Figure 30: Optimum Cablevision triple play ad—save $500 advertisement
- Figure 31: Cablevision advertisement
- Cable ISP ads
- Comcast Cable
- Figure 32: Comcast advertisement
- Time Warner Cable
- Figure 33: Time Warner advertisement
- Charter Cable
- Figure 34: Charter advertisement
- RCN
- Figure 35: RCN advertisment
- DSL ads
- AT&T
- Figure 36: AT&T advertisement
- Figure 37: AT&T advertisement
- Verizon
- Figure 38: Verizon advertisement
- Figure 39: Verizon advertisement
- AOL (DSL)
- Figure 40: AOL advertisement
- EarthLink (DSL)
- Figure 41: EarthLink DSL advertisement
- Bell South
- Figure 42: Bell South Advertisement
- FiOS
- Figure 43: Verizon FiOS advertisement
- Preparing for the next stage in ISP advertising
- How Consumers Connect to the Internet
- Summary
- On the home desktop
- Figure 44: Use of dial-up, selected demographic segments, March 2007
- From laptops
- Figure 45: Laptop connection classification, March 2007
- Figure 46: Laptop connection classification, selected demographics, March 2007
- Why some respondents continue to use dial-up
- Desktop users
- Figure 47: Why desktop dial-up users do not switch to broadband, March 2007
- Laptop users
- Figure 48: Why laptop users do not switch to broadband, March 2007
- What Internet Service is Used For
- Summary
- Use of the Internet for work, games, music, video, and IM
- Figure 49: Use of the Internet for work and entertainment (games, music, video, and IM), March 2007
- Figure 50: Use of the Internet for work and entertainment, by age, March 2007
- Figure 51: Use of the Internet for work and entertainment, by household income, March 2007
- Figure 52: Use of the Internet for work and entertainment, by race/ethnicity, March 2007
- Selecting and Changing Service
- Summary
- Who selects service, service interruptions, and recent changes in service
- Figure 53: Who selects service, service interruptions, and recent changes in provider, March 2007
- Figure 54: Service selecton and service interruption, by age, March 2007
- How consumers research a service change
- Figure 55: Research before selecting an ISP, March 2007
- Figure 56: Research before selecting an ISP, by age, March 2007
- Figure 57: Research before selecting an ISP, by race/ethnicity, March 2007
- Figure 58: Research before selecting an ISP, by educational attainment, March 2007
- Primary reason for selecting an ISP
- Figure 59: Most important ISP decision factor, March 2007
- Figure 60: Most important ISP decision factor, by current type of service, March 2007
- Interest in add-on services
- Figure 61: Interest in add-on services, March 2007
- Figure 62: Interest in add-on services, by age, March 2007
- What makes a service sticky
- Figure 63: Satisfied ISP customers, March 2007
- Figure 64: Satisfied ISP customers, by age, March 2007
- Figure 65: Satisfied ISP customers, by income, March 2007
- Why consumers switch
- Figure 66: Reasons consumers changed ISPs, March 2007
- Figure 67: Reasons consumers changed ISPs, by type of current connection, March 2007
- Appendix: PC Ownership
- Figure 68: PC ownership, January - October 2002-06
- Figure 69: PC ownership, by age, January - October 2006
- Figure 70: PC ownership, by race/ethnicity, January - October 2006
- Figure 71: PC ownership, by household income, January - October 2006
- Figure 72: Computing platforms, by marital status, January - October 2006
- Appendix: Trade Associations
AbstractInternet service providers (ISPs) are companies that provide two-way data connections to a fixed location via a modem. Driving growth and change in the industry are increasing through needs and technical savvy of American consumers, and technological and infrastructural developments that increase Internet bandwidth.
This report will enable readers to make informed decisions about the rapid changes in the home Internet services market, such as increasing connection speeds, increasing consumer technical literacy, and the service and speed concerns of the users who switch ISPs. Using this report, you will be able to craft marketing strategies that take advantage of technological change; target your advertisements with regard to features, services and products; and focus new product development on Internet users’ most urgent needs.
This report includes discussions of the following critical topics in the home ISP industry:
- Penetration, and the nearing maturity of the market
- Technological solutions for bringing broadband to rural America
- The rise of discount dial-up
- The potential of fiber-optic connections to the home (FTTP)
- America’s hunger for bandwidth
- Connection reliability
- Price skirmishes, triple-play, and commoditization
- The threats posed by wireless broadband, and municipal and commercial WiFi
For the purposes of this report, Internet service includes wireline and wireless delivery of fixed point service to a consumer household. This includes DSL, cable, dialup, municipal WiFi and WIMAX but does not include, for example, mobile broadband over the 3G cellular protocol.
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