5 minute read 16 Sep 2019
Girl phone app remote control watching TV home

How TMT companies need to adapt to customers’ changing digital needs

Authors
Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Martyn Whistler

EY Global Media & Entertainment Lead Analyst

Keen observer of all things media and entertainment. Storyteller. Avid reader. Bluff traditionalist, impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.

5 minute read 16 Sep 2019
Related topics TMT

Our survey findings discuss consumer’s attitudes toward technology, media and entertainment, and telecommunications (TMT) services in the home.

Our research, Decoding the digital home 2019 studied consumers’ attitudes toward a range of TMT services in the home. The insights were generated through an online survey of 12,500 broadband households between October and December 2018 across four markets — France, the Netherlands, the UK and the US. The survey questionnaire consisted of 54 attitudinal questions, enabling us to segment respondents into eight different groups. Additional analyses and insights have been provided by EY’s global TMT team.

Broadband households between October and December 2018 across four markets — France, the Netherlands, the UK and the US infographic

Six key takeaways for TMT providers

1. While consumers have an intimate relationship with the internet, clear symptoms of digital fatigue are emerging

The internet is the critical foundation of consumers’ digital, and increasingly social, lives as new devices and experiences blur the line between the physical and virtual worlds, empowering them to make new lifestyle choices.

The internet is fundamental to our social life inforgraph
Wearable technologies infographic

Yet, respondents in all four markets surveyed, especially younger consumers, voice real fears of overexposure to the online world, suggesting a growing sense of digital fatigue.

Away time from internet enabled devices infograph
2. Broadband performance matters most to consumers, but a lack of differentiation means service providers risk commoditization

Broadband connectivity is the gateway to the digital household, making consumers sensitive to speed and performance — and many fear that these would deteriorate if they switched providers.

Broadband performance matters most to consumers, but a lack of differentiation means service providers risk commoditization infograph

As a result, speed or reliability often rank ahead of price as a switching trigger.

speed or reliability often rank ahead of price as a switching trigger table

Yet, a significant majority of households in all four markets see broadband as just another utility, such as gas or electricity.  

Utility gas or electricity inforgraphic

In most cases, the default mindset is to minimize spend on telecoms — underlining the challenges for strategies based on selling premium products.

spends as little as possible on communications services infograph
3. The “streaming society” has gone mainstream, and traditional broadcasters are feeling the pressure

As streaming redefines how people across the world consume content, short online video has become the order of the day in most markets, with around one-third of the consumers already progressing to more sophisticated multiple-device streaming behaviors.

people in my household watch short video clips online
people in my household often streams online video content on multiple devices at the same time infograph

The move away from traditional TV channels is currently more advanced in the US than in Europe. 

watches TV on traditional channels infograph

But an analysis by age shows younger consumers everywhere are less bonded to traditional broadcasters — reinforcing the threat of future disruption.

analysis by age shows younger consumers everywhere are less bonded to traditional broadcaster infograph
4. Consumer internet of things (IoT) products are gaining momentum, but there is no guarantee of continued growth

With digital home assistants and smart speakers leading the way, current take-up rates for smart home products and services look promising. 

digital home assistants and smart speakers leading the way, current take-up rates for smart home products and services look promising infograph

The brightest adoption outlook over the coming five years is for smart utility and security services.

The brightest adoption outlook over the coming five years is for smart utility and security services infograph

However, a range of concerns, including high-price points, data privacy and the perception that they are a passing trend, could yet derail the take-up of smart-home capabilities. 

 high-price points, data privacy and the perception that they are a pasng trend, could yet derail the take-up of smart-home capabilities infograph
5. Worries over data privacy and security are undermining customer trust, but consumers are divided over how regulators should respond

Consumers in all markets are skeptical about disclosing their personal data, even to trusted websites. 

Consumers in all markets are skeptical about disclosing their personal data, even to trusted websites infograph

Most households are still unconvinced that recent data protection regulations will make much difference.

 data protection regulations will make much difference infograph

From the UK and the US, 41% of the respondents don’t think their personal data can ever be fully secure in the digital age. 

41% of the respondents don’t think their personal data can ever be fully secure in the digital age infograph

Opinions on the value of tighter regulation are divided, both by age and geography.

The internet should be very tightly regulated to restrict what people can access online infograph
6. Complex TMT offerings are creating confusion — with opaque introductory offers and complicated product installation undermining a smooth customer journey

Many consumers find service offerings difficult to understand. 

With opaque introductory offers and complicated product installation undermining a smooth customer journey infograph

Almost a quarter of consumers struggle to find their favorite content in the crowded service ecosystem. 

Almost a quarter of consumers struggle to find their favorite content in the crowded service ecosystem infograph

Product installation is a particular pain point for consumers. 

Product installation is a particular pain point for consumers infograph

Introductory offers are seen as obscuring the real value of bundles, risking the chances of alienating the customer. 

Introductory bundle offers make it difficult to work out which inter package represents the best value inforgraph

Five next steps for TMT providers

In the light of the findings in Decoding the digital home 2019, EY professionals think TMT companies should prioritize five steps:

1. Segment your target customers in new ways and tailor offerings accordingly

The needs of digital households are increasingly nuanced and divergent — the “one-size-fits-all” approaches no longer work. Some customers are digital devotees, while some are disengaged or even distrustful, and there is no guarantee that younger users will find the digital world any easier to navigate. TMT service providers must understand these widely varying attitudes and look to reflect them in their more targeted offerings. 

2. Help customers cut through the fog of confusion

Complex pricing models and opaque introductory offers mean customers are struggling to understand the true value and lifetime cost of what they are buying. They will be attracted to providers that present simpler, more transparent pricing plans that make it easier to understand the trade-offs between cost and value.

3. Don’t overload the bundle

The need for greater simplicity extends to bundles, where rising sophistication and complexity have reached overkill levels for many customers. Loading more features and options into increasingly convoluted bundles won’t help. In a crowded marketplace, clearly explained simple and effective packages, are increasingly going to win.

4. Focus actively on building trust — compliance alone isn’t enough

Households are hypersensitive about data disclosure. And, whatever the effects of GDPR are, 4 out of 10 people think safeguarding their personal data online is a lost cause. TMT providers need to go beyond boilerplate statements of compliance. They need to put data protection and responsibility at the heart of their customer interactions and wider service-innovation agenda. 

5. Help people to “get things to work”

For customers, a lack of confidence around getting products installed and running is a major pain point. And their confusion and uncertainty persist throughout the customer journey — across product discovery, purchase, usage and support. As digital home products become more sophisticated and expensive, people expect to receive the support and information they will need to get them working, instantly, every time.

Summary

The survey findings point to a number of significant trends underway across each of the four markets surveyed — France, the Netherlands, the UK and the US. While demand for new services and experiences is continuing to evolve rapidly, consumers are unnerved by several factors. These include confusion over the ever more complex landscape of offers and platforms, concern about the usage and security of their personal data, and low confidence about being able to get equipment installed and working. These issues, and more, mean households in all markets are progressing at different speeds toward their digital future. 

About this article

Authors
Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Martyn Whistler

EY Global Media & Entertainment Lead Analyst

Keen observer of all things media and entertainment. Storyteller. Avid reader. Bluff traditionalist, impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.

Related topics TMT