SOURCE: Claritas Inc.

October 31, 2005 12:05 ET

Claritas Convergence Audit Shows Consumers Are Slowly but Surely Increasing Adoption of Unconventional, Innovative Offerings

Phone Service Through Cable Companies and 'Pure-Play' VoIP Providers Is Beginning to Make Inroads; the Number of Wireless-Only Households Continues to Grow

SAN DIEGO, CA -- (MARKET WIRE) -- October 31, 2005 -- Today's American consumer -- confronted with a seemingly endless stream of evolving technologies and converging product offerings, such as Voice over Internet Protocol (VoIP) and video content available on cell phones -- continues to move at a measured, but upward, pace toward adoption, according to recent findings from the 2005 Convergence Audit™.

For example, the Audit shows that while only about one out of every 10 households is subscribing to phone service through non-traditional sources, including cable companies and 'pure play' VoIP providers, another three percent and four percent of households respectively say they definitely or probably will subscribe to phone service through a cable company or a VoIP provider in the next 12 months.

"Bolstering this trend is a comparatively high level of awareness of these services, with nearly 50 percent of households surveyed reporting they have heard of Internet phone service," said Kristen Borgman, a Director of Primary Research at Integras, the advanced analytical services division of Claritas Inc. that administers the Convergence Audit.

The audit is a survey of 50,000-plus households that covers the converging industries of wireline and wireless telephony, cable and satellite television, the Internet, and energy, providing important insight into consumer preferences and behaviors. Data from the 2004 Audit was recently featured in a USA Today cover story on the tech-savvy consumer. See article -- http://www.usatoday.com/money/industries/technology/2005-10-16-techie-adopters_x.htm

As for consumers who have not only abandoned traditional land-line phone service, but all land-line service completely, the study found that 12 percent of cell phone households today are wireless-only, up from seven percent in 2004 and five percent in 2003. This trend is further intensified in the 18-29 age group, where over one-third of all cell phone households are wireless-only, according to the study.

Consumers are also beginning to show shifts in the way they experience entertainment content, including videos, television, photos and music. Underscoring the increasing popularity of portability and convergence of electronics for entertainment, the study shows that just over 30 percent of households are viewing video content on their PCs, 29 percent are watching video with a portable video player, and 13 percent of households are viewing video content on their cell phone.

A sampling of other notable findings include:

--  Alternative Phone Service Usage by Age -- Subscribers to both types of
    alternative phone service -- cable and VoIP -- are much more likely to be
    from younger households. The highest penetration is among those under 35
    years old at six percent for cable phone service and four percent for VoIP.
    The numbers go down incrementally as age increases.
    
--  Primary Phone Service -- Among households with both traditional
    landline local phone service and cellular/wireless service, 16 percent
    indicated that they consider their cellular/wireless service to be their
    primary phone service.
    
--  Video Product Ownership -- Adoption of video products in the media
    spotlight today, such as DVRs, HDTV and LCD/plasma TVs, is still in the
    early stages, with market penetration for most of these products at 20
    percent or lower.
    
--  Video-on-Demand (VOD) -- Corresponding to a wider roll-out of VOD
    offerings across cable operators in the past year, on-demand use has grown
    significantly, with nearly 40 percent of digital cable households now
    viewing free VOD and movies on-demand, and 12 percent using subscription
    VOD.
    
--  DSL vs. Cable Modem -- Subscription Intent -- Among households without
    DSL, eight percent indicated they definitely or probably will subscribe in
    the next 12 months, and seven percent of the households without a cable
    modem indicated likelihood to subscribe. Further, those who are likely to
    subscribe to cable modem service skew slightly younger.
    
--  Reasons for Choosing The Type of High-Speed Connection -- In comparing
    cable modem service against DSL, nearly twice as many DSL households cited
    price and customer service as a reason for choosing this type of broadband
    service -- 33 percent of DSL subscribers cited price versus 18 percent of
    cable modem subscribers, and 20 percent cited service versus 15 percent of
    cable modem subscribers. For cable modem households, speed and reliable
    performance are more often a reason for their choice, with 74 percent of
    these households citing speed compared to 65 percent of DSL households. As
    for reliable performance, the split was cable modem at 42 percent and DSL
    at 38 percent.
    
About Claritas

Since 1971, San Diego-based Claritas has been the pre-eminent source of accurate, up-to-date marketing information about people, households and businesses within any geographic area in the United States. Its target marketing services are aimed at reducing the cost of customer acquisition and growing customer value. Claritas offers industry-leading consumer segmentation systems, consulting services and software applications for site analysis, advertising sales and customer targeting. Claritas is a division of VNU, a world-leading information and media company that includes ACNielsen, Nielsen Media Research, Spectra Marketing Systems, and Scarborough Research, among others. To learn more about Claritas and VNU products and services visit their web sites at www.claritas.com and www.VNU.com.

About Integras

A division of Claritas Inc., Integras combines sophisticated quantitative analysis with the broadest array of consumer and business data available in the United States to help companies make better strategic decisions. In addition to conducting four syndicated surveys (Convergence Audit, Restaurant Audit, Insurance Audit, Market Audit), the Customer Research and Targeting business unit of Integras conducts custom primary market research on behalf of its clients. To learn more about Integras products and services, visit its web site at www.integrasconsulting.com.

Contact Information

  • Contact:
    Stephen F. Moore
    Claritas Inc.
    (858) 677-9634
    Email Contact