Broadband Survey Highlights Challenges for AOL

Broadband subscribers still don't seem too excited about online entertainment in general, or AOL Time Warner (AOL Quote) in particular.

Such is the takeaway from a recent survey conducted by technology research and consulting firm Strategy Analytics.

Polling 525 subscribers to high-speed, or broadband, Internet service, Strategy Analytics found that media-intensive applications of broadband -- downloading music, streaming video and swapping digital photographs -- remain low on the priority list of people who sign up for high-speed service.

Furthermore, AOL Time Warner -- the media and entertainment conglomerate that seeks to translate America Online's domination of the dial-up Internet market into broadband Internet success -- has a surprisingly weak brand name among media-hungry customers, according to the survey.

While not definitive, Strategy Analytics' survey indicates the challenges facing major players in broadband -- among them AOL Time Warner and telcos such as Verizon (VZ Quote) and SBC Communications (SBC Quote), which are trying to gain share from the cable TV operators that dominate the high-speed Internet connectivity market.

At the end of March, 17.5 million households subscribed to high-speed Internet service via a major cable operator or telco, according to market research firm Broadband Intelligence. That subscriber count, up more than 50% from year-earlier figures, breaks down to roughly two-thirds cable modem subscribers and one-third DSL customers.

While the broadband subscriber count has climbed, the motivations behind its adoption has surprisingly stayed the same, says Strategy Analytics analyst James Penhune. When survey participants were asked to identify important factors behind their switching to broadband, they led with connectivity and price issues, not premium content or advanced features, says Penhune.

By a large margin, the top reasons subscribers cited were faster access, freeing up a phone line and an always-on connection. The most popular media-related factor -- downloading music -- was ranked seventh on the list, behind not needing a dedicated phone line and multiple PC access.