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J.D. Power Reports: Popularity Of Internet Entertainment Services Creates Customer Retention Challenges For Digital Lifestyle Providers

WESTLAKE VILLAGE, Calif., Aug. 21, 2013 /PRNewswire/ -- As the popularity of Internet entertainment services grows among consumers, digital lifestyle providers face customer retention challenges and seek to extend bundled service offerings, according to the J.D. Power 2013 Digital Lifestyle Study SM released today.

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The study, now in its second year, examines consumer brand loyalty, propensity to subscribe to digital lifestyle products and preferences for aggregation of a wide array of services from one provider. Referred to as a digital lifestyle service package, it includes such entertainment components as video, television, audio and gaming; monitoring components, including home security, energy management and healthcare services; communication components, such as voice, Internet and wireless; and such other components as data backup and smart appliances.

KEY FINDINGS

  • Consumers most often choose Internet service to include in a bundle, followed by voice and video, respectively.
  • Consumers intend to bundle voice services, despite available alternatives.
  • Consumers are receptive to home healthcare services.
  • Younger consumers are most likely to share personal information, but expect free services in return.

The study segments consumers into five groups, based on age and other demographic and psychographic characteristics, in order to provide insights into their current and future digital lifestyle bundle preferences. Those segments are low-tech empty-nesters--mature households who use technology that has minimal impact on their daily lives; the family that techs together--teen and kid-focused technology purchase behaviors; generation wireless--youngest household  profile, with high investment and engagement in technology; offline seniors--elderly households with little technology interaction or concern; and emerging traditionalists--nuclear family household profile, with average technology investment.

Nearly two-thirds (61%) of consumers consider Internet service as the foundation of their future digital lifestyle bundle. It is the most-frequently chosen service in consumers' present and future digital lifestyle bundles, indicating that consumers understand the necessity of having fast, reliable broadband for entertainment, home automation and other services. While 70 percent of consumers in the offline seniors segment include Internet in their ideal bundle, only 54 percent of those in the generation wireless segment indicate the same. Younger consumers have a high propensity to be connected to the Internet and may rely more heavily on mobile broadband and publicly available networks.

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