Broadband Technology - What Do Broadband Consumers Want?

Studies indicate that speed is the primary motivation for having a broadband connection. As of mid-2001, broadband users tended to surf the Internet more and make more online purchases than narrow-band users, but otherwise their usage patterns were the same. A secondary reason for having a broadband connection was that it freed up the telephone line, while a third factor was that the connection was always on.

There is conflicting data as to whether or not broadband users are interested in enhanced and premium services, and whether they are prepared to pay for them. In general, fairly large segments of online users have some interest in premium services, but only a minority say they are willing to pay extra for them. A mid-2001 broadband study by Strategy Analytics found that while 60 percent of all U.S. households with broadband connections expressed a "general interest" in value-added services offered only with a high-speed Internet connection, that percentage dropped to 25 percent if there was a $5 to $10 monthly fee involved. Furthermore, only 16 percent of all U.S. broadband households were interested in the services if additional hardware and/or software had to be leased or purchased.

A mid-2001 study by BroadJump provided additional details. Similar to the other research, the Broad-Jump study showed that anywhere from 50 percent to almost 70 percent of broadband users expressed a general interest in certain applications and services, including virus protection, firewalls, streaming audio, and Internet telephony. When it came to paying for these benefits, though, the number interested dropped considerably:

• virus protection (28 percent willing to pay)
• firewall (26 percent)
• Internet telephony (20 percent)
• software rental (19 percent)
• video on demand (19 percent)
• instant messaging (16 percent)
• streaming audio (15 percent)
• and online gaming (12 percent).

Conversion rates from "general interest" to "willing to pay" were highest for software rental (75 percent conversion rate), followed by video on demand (60 percent), video conferencing (45 percent), firewall (42 percent), virus protection (41 percent), and Internet telephony (40 percent). Although video on demand had a high conversion rate, the BroadJump study revealed that users would prefer to view the videos on TV rather than on their computer. From the study it appeared that premium entertainment content was less important to U.S. broadband users than utility services.