Sixty -Five Percent of Internet Households Ready to Switch to Bundled Services to Save $20 per Month

Cost currently trumps convenience for a majority of Internet households; service provider challenge is to sell value beyond monthly cost savings

October 14, 2004 Dallas, TX - Over 60% of all Internet households would be willing to consolidate their services under a single provider if so doing saved $20 per month, according to Bundled Services: Analysis and Forecasts, a new industry report from Parks Associates. This prospect of cost savings far outweighs convenience as an influencing factor, for only 43% of these households would switch to a video, telephone, and Internet bundle without a savings incentive.


"Cost is important to subscribers, and at least some savings must be a central theme of any successful campaign for bundled services," said William Cheek, an analyst with Parks Associates. "The challenge for service providers will be to not to simply underprice their service packages in a shortsighted attempt to stem churn and attract new customers. Instead, they will need to define value to their customers that includes such variables as the convenience of all services on one bill, one point of contact for service issues, and value -added features and applications that can be layered upon basic services."

The study, based on an Internet survey of over 4,000 households conducted by Parks Associates, also found that 74% of households likely to upgrade to broadband Internet in the next 12 months would subscribe to a bundled service package that could save them $20 per month for data, voice, and video services.

"This is encouraging for service providers," Cheek said. "As more households switch from narrowband to broadband, the number of households with bundled services could increase almost in tandem, provided that providers offer and adequately demonstrate the value - above and beyond cost savings - of these options."

Bundled Services: Analysis and Forecasts examines the market for both three -tiered and four -tiered bundled service offerings from cable and telecom service providers. The report, to be released in November, profiles current bundled service subscribers, identifies households likely to subscribe to a bundled service, and forecasts subscriber growth among bundled service subscribers. For more information about this study, please contact Parks Associates at 972 -490 -1113 or sales@parksassociates.com.

About Parks Associates: Parks Associates is a market research and consulting firm focused on all product and service segments that are "digital" or provide connectivity within the home. The company's expertise includes home networks, digital entertainment, consumer electronics, broadband and Internet services, and home systems.

Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start -ups through market reports, multiclient studies, consumer research, workshops, and custom -tailored client solutions. Parks Associates also hosts Fall Focus and co -hosts CONNECTIONS(TM) (in partnership with the Consumer Electronics Association) each year. www.parksassociates.com

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