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Bundle Survey: Findings Don't Jibe with Our Reality

ico_10.gif We’re not sure who Forrester Research surveyed in studies cited in The Washington Post yesterday, but we seriously doubt they talked to many Cox Communications customers. The piece questioned whether consumers really want to purchase “bundles” of multiple communications and entertainment services. The title, “No Bundle of Joy,” leaves little doubt about the conclusion the article was trying to make. One of the claims attributed to a Forrester Research analyst was that “surveys show that only 5 percent of subscribers buy bundled services.” Hmmm.... We think they must have bypassed Cox markets with these surveys, since close to 50 percent of our customers—yes, that’s 5-0—buy at least two major services from Cox (from among our cable, digital telephone and high-speed Internet offerings). Further, we’ve found that customers are clearly satisfied with the bundle, since churn drops dramatically among those who subscribe to more than one service. We suspect other Cable companies might take exception with Forrester’s finding, too.


UPDATE: Forrester Research analyst responds: "...the quote is a classic misinterpretation of the data." Click below to see full comments.

Posted on March 23, 2006 03:18 PM | Comments (2)

« ‘Hello, Kettle? This is Pot...’ | Main | Blasting ‘Astroturf’ »

Comments

This article seems to have provoked quite a bit of controversy. I specifically told the reporter that this was triple play bundle of voice video and data. She did not report this. Many operators have 40% of two products, but this is not three products. In general, most consumers are not yet to buy this style of bundle. Many do buy Local LD or cable and BB for example. Also, my operators count these bundles differently. For example, you would count voice as 1 service, Verizon would count it as two if it was local and LD. Broadband is one for everyone, and cable TV is one or several depending on the services definitions. At any rate, the quote is a classic misinterpretation of the data. This frequently happens when the analyst provides the information, but not a written report for reference. In April, we will be publishing a report with numbers for 2 products and for 3 product bundles.

Posted by: Maribel Lopez, Forrester Research | March 24, 2006 11:19 AM

There is an issue with the quote in that it does not explicitly say triple play. However, the issue in my mind is still that consumers are not yet interested in acquiring all of their primary services from one provider ( voice video data) – which is what every provider is now trying to pitch. Also, they will buy some things bundled but only to get a discount. If we as an industry want bundling to be successful, we need to offer more value than a cheap sale. This is when triple play will take off. Also, I think we all need to have one industry definition of what we mean when we say bundling. Would you consider bundling local and LD? Would you consider it cable and broadband? Everyone I speak to has some fuzzy definition that is any two products. No one is yet reporting triple play. So to be clear. I don’t believe consumers want triple play/quad play…because we have given them no valid reason to want it.

Posted by: Maribel Lopez, Forrester Research | March 24, 2006 04:08 PM

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