The rise of the ‘connected home’: Are consumers willing to pay for extra services?

Jun 17, 2011 | Uncategorized

With more and more household devices becoming connected to the internet, such as energy controls and security systems, are consumers willing to pay the extra costs these systems will entail? New research from Ovum takes a closer look at the home of the future… 17/06/2011 Broadband service providers keen to grow their business by offering […]

With more and more household devices becoming connected to the internet, such as energy controls and security systems, are consumers willing to pay the extra costs these systems will entail? New research from Ovum takes a closer look at the home of the future…
17/06/2011


Broadband service providers keen to grow their business by offering additional connected home services should target the home security and monitoring, smart energy control and media sharing markets, according to new Ovum research.
However, the independent telecoms analyst finds that to translate this opportunity into revenue growth, broadband providers must first jump the hurdle of consumers’ unwillingness to pay for additional services.
As part of the research, Ovum surveyed consumers to gain insight on current uptake of additional connected home services from broadband providers, and which offerings consumers are most interested in receiving.
Currently email, technical support and PC security are the most common additional services to be taken by customers from their broadband provider. However, the research found that although uptake of home security and monitoring, smart energy control and media sharing services is currently fairly low, they offer good potential, as consumers expressed strong interest in receiving them in the future.
When it comes to home security, where broadband providers could potentially offer services such as monitoring and control via smartphones, the research found that 21 per cent of those surveyed would be interested in receiving this service.
Michael Philpott, Ovum principal analyst and report author, commented: “The strong interest from consumers shows the potential this market offers to broadband providers. However, to realise it they will need to get their price right, as with all connected home services, low willingness to pay is a major factor. According to our survey, just four per cent of those that expressed an interest would be willing to pay some of the high monthly fees that are currently on the market.”
Meanwhile, 27 per cent of consumers said they were interested in receiving smart energy solutions, which would help them to control and monitor the amount of energy they are using. And a total of 20 per cent said a media sharing service, connecting all the devices used by the home owner would be something they would potentially like to receive from their broadband provider.
Mr Philpott continued: “Smart energy solutions are a hot topic in many countries and a significant proportion of people would be interested in receiving services from their broadband provider. The US has the greatest proportion of people willing to pay for the service, with just 16 per cent saying they wanted it for free.
“Although starting from a low base, media sharing is another service with significant potential, especially in France, Spain and the US. However, pricing is again an issue, with many of the consumers we surveyed stating that they would expect to get this service for free.”
Ovum is part of the Informa Group
Source: www.ovum.com

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