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Broadband Adoption at Home: Trends & Prospects

Broadband Adoption at Home: Trends & Prospects. John B. Horrigan February 10, 2005 PURC Annual Conference: Emerging Technologies and Trends. Presentation Overview. Big picture on internet access Latest in home broadband adoption The adoption environment The migration to broadband.

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Broadband Adoption at Home: Trends & Prospects

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  1. Broadband Adoption at Home: Trends & Prospects John B. Horrigan February 10, 2005 PURC Annual Conference: Emerging Technologies and Trends

  2. Presentation Overview • Big picture on internet access • Latest in home broadband adoption • The adoption environment • The migration to broadband

  3. Portraits of Access: end of 2002

  4. Portraits of Access: end of 2004

  5. Broadband at home, 2000-2004

  6. Broadband at home – segments (April ’03 & Nov-Dec ’04 surveys)

  7. Types of Home High-Speed Connections (end of ’04)

  8. Broadband at home – subgroups(% of all in group, end of 2004)

  9. Broadband at home – regions (% with broadband of all in group, end of 2004)

  10. Broadband gaps over time (I) (% with broadband of all in group)

  11. Broadband gaps over time (II) (% with broadband of all in group) 2004 data through June ’04

  12. Availability • 77% of Americans say broadband is available where they live • 8% say it’s unavailable • 15% don’t know • Rural gaps • 27% of rural dial-up users say it’s not available • 11% of non-rural dial-up users say it’s unavailable • Overall, 14% of dial-up users say broadband is unavailable where they live • All data on this slide from October 2002 survey

  13. Adoption environment: price, service providers • Among those with broadband or who know it’s available where they live: • 61% say they have more than one service provider • 17% say they have a single service provider • 22% don’t know • Price (I) • $38.50 for those with > 1 service provider • $42.80 for those with a single service provider • Price (II) – average monthly broadband price=$39 • $38 for DSL users • $41 for cable modem users • Data on this slide from February 2004 survey

  14. Adoption environment: who wants it? • Of dial-up users, in Feb ‘04: • 40% say they want broadband • 58% say they don’t want it • In Oct ’02, of dial-up users: • 38% say they want broadband • 57% say they don’t want it • Home broadband growth from 10/02 to 2/04: • 24%  42%

  15. Adoption environment: changing user preferences? • Puzzle • Size of dial-up pie shrinks, but share of dial-up who want broadband stays about the same. • What gives? • Probably because some dial-up users who in ’02 said they didn’t want broadband do say this in ’04  approx 10%-15% do. • Why? • People do more things & spend more time online the longer they’ve been internet users. • This changes the online time preferences of dial-up users.

  16. Evidence: online experience and intensity of use • Average number of years online for dial-up users who want broadband: • 6.2 years • Average number of years online for dial-up users who do notwant broadband: • 5.3 years • Average number of years online … • Broadband users = 7.0 • Dial-up users = 5.7

  17. What drives intensity of internet use? • Measures of intensity of internet use: • Probability of logging on, given day • Amount of time online, typical day • Number of online activities, given day • Largest independent predictor: • Having a home broadband connection • Number of years online • Between 1-2 years of online tenure will boost time online/number of activities just as much as a high-speed connection at home

  18. Time online per day -- by type of connection & online experience(June 2003 data)

  19. Reasons for switching to broadband at home (Feb ’04 data)

  20. What does this mean? • People’s online time preferences change with experience. • Dial-up becomes a hassle as people do more things online This changes the value proposition of being online • The bits per buck calculation: • 200 bpm/$20 = 400bpm/$40 • Upshots: • Broadband is a good deal for experienced dial-up users when they reach a certain point in the evolution of their online behavior. • Price points may not be not a big part of the calculation

  21. What does this mean for future adoption? • Uptake has been very fast, notwithstanding the #11 world ranking for the U.S. • Work to be done to close availability gaps • Is it possible to change users’ online time preference? • Yes, online content becomes more compelling • So far, though, evidence shows a single application doesn’t drive switch to broadband • High-speed users do more of everything, not more of one thing

  22. Notes • Except where noted, data used here is from the Pew Internet Project’s national random digit dial telephone survey in Nov-Dec 2004 of 3,114 Americans. • The Pew Internet & American Life Project is a project of the Pew Research Center • Contact me at: jhorrigan@pewinternet.org

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