Communication Trends Highlights from the 2009 Nielsen Convergence AuditIntroductionVOD, DVR, VoIP, FiOS—you may need a dictionary to decipher the acronyms of some of the latest technology advances that have re-defined the media and telecommunications landscape in the U.S. Understanding the media and communications habits of today’s consumers more deeply than the competition offers companies the best way to win in this hyper-competitive, fragmented environment.To understand consumers’ attitudes and behavior towards voice, video and data products, Nielsen conducts one of the largest surveys of its kind—the Nielsen Convergence Audit. The Convergence Audit® is an annual survey that collects more than 32,000 U.S. online and mail respondents. The most notable trends in 2009 include a rise in households who have “cut the cord” by trading their traditional landlines for wireless cellular services and an increase in mobile media device usage among a diverse set of households.Interestingly, in terms of psychographic Cutting the telephone cord Blackberry versus iPhonedifferences, the iPhone household has a While an overwhelming majority, 88%, Nielsen reveals that approximately 15% slight edge over the Blackberry household of U.S. households have a wireless phone of U.S. households own a smart phone. in being the first to seek out the newest in 2009, most still maintain a traditional In spite of the recent sales success of technology. Blackberry households ...
Communication Trends Highlights from the 2009 Nielsen Convergence Audit
Introduction o i—you may need a dictionary to decipher the acronyms of some of the latest technology advances that have redefined the media and telecommunications landscape in the .. nderstanding the media and communications haits of today’s consumers more deeply than the competition offers companies the est ay to in in this hypercompetitive fragmented environment. To understand consumers’ attitudes and ehavior toards voice video and data products Nielsen conducts one of the largest surveys of its ind—the Nielsen Convergence Audit. The Convergence Audit® is an annual survey that collects more than 2000 .. online and mail respondents. The most notale trends in 2009 include a rise in households ho have “cut the cord” y trading their traditional landlines for ireless cellular services and an increase in moile media device usage among a diverse set of households.
Cutting the telephone cord lacerry versus ihonenterestingly in terms of psychographic difference hileanoverhelmingmaorityNielsenrevealsthatapproimatelystheihonehousehohloduhsaeshaoldof..householdshaveairelessphoneof..householdsonasmartphone.isnligheitnedgheeofiverthelacerryin2009moststillmaintainatraditionalnspiteoftherecentsalessuccessoftechngtrsttoseeouttheneestlandlineathome.Hoeverthisischanging.theihone®theearlierintroductiontendtoologayi.lacerryhoucshenhoollodsisntheseconduarterof2009overoneinofthelacerry®givesthemahighertuntilanetegyo fivehouseholdsreportedtheyareirelesspenetrationrateofversusfortheproveneforedinivehsotninega.uHdoienecverthcellularonly—anincreaseoffromihone.iventhehighpricepointofothleatcechenrroyloagnysavvyearlyadoepstetresnodftothe past year. This increase comes from devices the demographic profile of the technolo ireless oriented . the tothirds of households ho have lacerry and ihone user loos very gy and dropped their landlines as ell as from similar—oth appeal to households ith young adults that started ne households higher income and education levels. ith ust a ireless phone service. P h Wireless Cellular Only Penetrationsychograp ic Differences (iPhone vs. Blackberry) 21% prefer o ai unil a ne echnology has76% 18%been proven in he arke before buying i 15% 15%79%
rimary reasons for prepaid phones ost ireless cellular phone users have a postpaid contract ut of house holds use prepaid phones. This attractive “payasyougo” option offers simplicity and minimal commitment hich are noted as the primary reasons for choosing this type of service plan. Primary Reasons for Prepaid Wireless Cellular Phone Service sSiimmpplleetpolauns/e14%
No monthly bill
Emergency use only
No lengthy contract
Budget control
For use by child/teenager
Credit issues
Received as a gift
Ppraeyfecrastoh3%
7%
5%
5%
Total sample sie 2.
13%
13%
10%
9%
oile media epansionor many of the moile media devices This year all media player prod ts in more technologically savvy people drive themarethaveseengroth.uicvenagroth.Hoeverconsumershoaren less technology oriented have emraced itinocnresaasnedinavtailaduilcittiyonpsrotdhuecsteotpypesgamingdevicesanduse’sheavily.ofproductcsosharveeecomemoreminurtheranalysisoftheConvergencea Audit data usage among to Nielsen stream. ith onethird of households Conneions lifestage groups—oung oning gaming devices o® 0 ireless and rugal ols—demonstrates laystation® or ii® and digital video this trend. recorders they are ecoming ell estalished products that continue toThe Conneions® household segmenta ehiit healthy yearoveryear grothtion system groups consumers into rates. roth of portale musicsegments ased on voice video and players ithout video capailitiesdata consumption as ell as consumer leveledoffin2009at2.Adoptionoftechnology adoption or Technodoption. other alternative media player productsThe Conneions segments fit ithin is still in the early stages although0 lifestage groups ased on the comi all have ehiited groth this year.nation of technology adoption age and ost notale are devices that offerfamily structure. video capailities.
Media Player Products Currently in Household o 360 33 Playstation or ii 3 30 32 orio2728 9 2 PoPrtlaaybleerMiPt3hoMuutsic2 2 ideo Caabilities 7
Cellhone with MP3 Music Player Sony PSP or intendo S Portable ae Player Cell Phone with Streain ideo Caabilities Portable MP3 Player (Such as iPod) with ideo Caabilities Total sample sie 2.
TheYoung & Wirelessgroup consists mostly of young upscale singles and couples ho set trends and love technology. These households adore ireless devices and connect to the nternet y cell phone laptop and handheld devices lie ihones and lacerries. any gave up their landline telephones—if they ever had them for — cell phones ith and video players. They suscrie to a ut use it less heavily as they spend most of their leisure time online donloading music atching streaming video and instantmessaging friends as ell as checing out information aout os cars and apartments. erious music fans they rarely travel ithout their players or car radios laring. hen it comes to cool technology they on it. ith their more loermiddleclass incomes from luecollar and service industry osFrugal Folksoast more moderate technology tendencies. thnically diverse and idely scattered throughout the euran landscape these Americans spend hat they can on technology to eep their children entertained at home indulging them ith video game consoles and portale game players as ell as educational computer softare. These videofocused households atch their for more than four hours a day as ell as atching ondemand T. They rent movies at a video store and use their ids’ game systems to atch video content. odest incomes depress technology usage and lead these households on a constant search for cheaper alternatives for phones and the nternet.
ier optic T groth
ier optic Ts continued to gro over the past year ith penetration increasing from to . ier optic T homes tend to have higher incomes ith almost one in three suscrier households earning 00000 or more compared ith ust of all other T households. Those sitching to this relatively ne service tend to e early adopters of technology.
ConneXions Index: Young & Wireless and Frugal Folks
250
200
150
100 lakerr ihone Cord uers Cell hone Cell hone orale gae Video gae DVR heav ih ih sreaing laer eg onsole users usi laer video aaili on or eg Xox 0 hours inedo D lasaion 50 or Wii Young & Wireless Frugal Folks 0
49
999
Fiber Optic TV Subscribers by Income
11499 3% 1 8%
11%
14%
18%
19%
19%
24%
23%
46%
HHs Not Subscribing to Fiber TV HHs Subscribing to Fiber TV
Households not suscriing to ier T 09 and households suscriing to ier T .
The evolving landscape
The cutthroat telecommunications landscape continues to evolve ith consumers simultaneously deepening their commitment to ireless services and responding to highervalue undles from their ireline cale or telecom provider. The groth of erion’s i and ATT’s verse services underscores the parallel groth of these technologies. Consumers suscriing to ireless cellular services epect not only telephone com munication ut also valueadded features from simple enhancements lie an player to nternetaccessile smart phones. espite their higher costs smart phones ill continue to gain maret share. The enefits of moile email and the nternet coupled ith improvements in nternet display capailities and netor speed ill continue to drive this trend. imilarly cordcutting households ill continue to gro in numers as consum ers find ireless cellular service meeting their needs further pressuring the telecommunications landline usiness. repaid cell phones ill also gain as some consumers see the simplicity they offer and others loo for more mini mal financial commitments during the economic donturn. As a result of these trends traditional ireline telephony has ceased to offer highprofits relialy for telecommunication companies.
Conclusion Advanced services ill continue to transform our lives. As the costs of these services come don more and more con sumers ill purchase devices that connect entertain and inform them at home as ell as hen they are aay from home. To in telecommunication mareters must continue to stress the value of their products eigh the costs and the enefits of each service and each campaign more critically. They must also understand the nuances—and particularly the differences eteen—of the people ho ill ecome their ne customers and those ho com prise their eisting customer ase. Those companies ho can uicly differentiate their customers ill prosper.
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