||'Home Run' Entertainment/Communication Packages Are On the Rise
AT&T has its "Triple Play." Comcast is constantly trying to sell its Xfinity package of voice, Internet and television services in one bundle. Soon, however, consumers may be seeing more "Home Run" offerings that include a fourth service -- wireless phone -- as well.
According to research company Strategy Analytics, 13% of U.S. households will participate in bundled offerings that include fixed voice, Internet, television and mobile voice services by 2016. That's a fourfold increase over the current levels, says Ben Piper, director of Multiplay Market Dynamics for Strategy Analytics.
"Quad play bundling has had a slow start in the U.S., but we see increased momentum over the next five years," Piper says. Some of the companies currently offering quad play services include AT&T, Verizon and Cox Communications, he says.
Already, 57% of U.S. households are considered "multiplay," meaning that they subscribe to more than one entertainment or communication service from the same provider. (AT&T, for instance, says more than 75% of its U-Verse TV subscribers receive that service as part of a bundled offering.) Although the "quad play" services will increase over the next five years, the packaging of three service types will remain the dominant bundle, Piper says.
While many of these packages will be discounted offerings (at least initially) to consumers, the true marketing opportunity will come in building a relevant consumer brand that people will trust for all their varied communications and entertainment needs.
"Bundling will certainly be driven by discounting, but branding also plays a key role," Piper told Marketing Daily via email. "We have long said that it is the perception of value that motivates customers to churn. The success of the bundle will depend on service providers' ability to articulate this value."
While bundling services presents an opportunity to keep customers, it also presents a greater risk to service providers should a customer find any one of those customer experiences lacking, Piper says. "When a customer decides to break up, it's generally the entire customer relationship that goes out the window, not just a piece or part," Piper says. "In a survey we just fielded of U.S. households, bundled subscribers were only slightly less likely to churn than non-bundled. Again, it comes down to branding and communicating a message of value to the subscriber."
(Source: Marketing Daily, 08/02/11)