#United States #Dallas #Home Services #Parks Associates #ARPU

Increase in ARPU for Home Service Bundles in 2024

Parks Associates, a renowned market research firm, has released insightful findings regarding Average Revenue Per User (ARPU) for home service bundles. Their ongoing research, which examines consumer surveys from 8,000 internet households in the United States, indicates a notable increase in ARPU for traditional services bundled with home internet in the third quarter of 2024 compared to the same period in 2023.

Key Findings

The study specifically highlights the growth in traditional double-, triple-, and even quad-play bundles that include a variety of services such as mobile plans, pay TV with live channels, home phone, and professionally monitored security services. Of these, bundles incorporating home phone service have experienced the most significant growth.

As per Kristen Hanich, Research Director at Parks Associates, "ARPU for bundled services is increasing, while overall adoption of bundles with value-added services such as streaming video or smart adaptive Wi-Fi has declined. As of the third quarter of 2024, only 57% of U.S. internet households had a value-added bundle, compared to 61% in 2023."

Declining Execution of Value-Added Bundles

The dip in the adoption of traditional bundles is largely attributed to a decrease in the popularity of home phone services and conventional pay-TV offerings. Additionally, many consumers are now gravitating towards less expensive, barebones internet service plans. Hanich emphasizes that while bundling can effectively enhance customer satisfaction and loyalty, leading to an increase in ARPU, consumers are increasingly price-sensitive and opting to do away with certain value-added services.

Implications for the Market

The findings suggest a dual trend in consumer behavior: while the demand for traditional service bundles has risen, there is a concerning decline in value-added services. This indicates a shift toward prioritizing budget over comprehensive service options among consumers. The decrease in adoption of value-added service bundles points to an evolving landscape where consumers are seeking more cost-effective solutions.

Upcoming Event: CONNECTIONS™ Summit

In alignment with these trends, Parks Associates will be hosting the 19th annual CONNECTIONS™ Summit titled 'Business of Smart Home' on January 7, 2025, in Las Vegas, in partnership with the Consumer Electronics Show (CES®). This summit will feature sessions, including "Navigating the Multifamily IoT Markets," discussing how smart home technologies can cater to the needs of both residents and property management in multifamily settings.

The Role of Bundling in Customer Satisfaction

As companies compete for market share, understanding the dynamics of customer preferences is crucial. Bundling can serve as a strategic tool not only to enhance customer experience but also to improve ARPU, as consumers often find better pricing when services are bundled compared to purchasing them separately.

With the evolving consumer landscape characterized by greater price sensitivity, companies may need to reevaluate their offerings to align with changing consumer expectations. The data collected and insights derived from Parks Associates’ research will prove valuable for stakeholders in the home services industry.

Final Thoughts

As we move deeper into 2024, staying attuned to these trends will be essential for brands looking to retain and grow their customer base in the competitive home services market. Parks Associates continues to provide critical insights and research that can help industry players navigate these shifts effectively. For those interested in a deeper dive into the data or seeking expert commentary, Parks Associates welcomes inquiries and discussions beyond the published findings.