7 minute read 29 Sep 2021
African american family using tablet

The six key trends driving the digital home 2021

Authors
John Harrison

EY Americas Media & Entertainment Leader

Transformative leader with a passion for media and entertainment. Identifying the opportunities afforded by convergence and disruption. Executing strategies to succeed in a fast-moving market.

Vincent Douin

Consulting Customer Principal, TMT sector, Ernst & Young LLP (EY)

Twenty years in telecom and cable. Enthusiastic advisor through the business and digital transformations of my clients.

Amritha A Joseph

Manager, Consulting, Ernst & Young LLP

Media professional and data analyst passionate about using customer data and market research to explain and influence consumer behavior. Enjoy writing about travel, food and finding fulfillment.

Paul Demascus

Manager, Business Transformation, Ernst & Young LLP

Consultant with a focus on growth strategy, go-to-market strategy and marketing transformation in the TMT space.

7 minute read 29 Sep 2021
Related topics TMT Media and entertainment

EY identifies trends and insights into consumer preferences, attitudes and behaviors toward technologies, products and services used at home.

In brief

  • Meeting demands of changing consumer behavior while providing tools to manage screen time and promote well-being is a key action item for TMT companies. Reliability should be central to the customer promise.
  • TMT companies should provide guarantees, tangible value and rapidly resolve issues. TMT companies can help consumers by becoming their trusted one-stop provider for all things connected to the smart home.

What a difference a year makes. In 2021, home isn’t just where we live; it’s where we work, entertain ourselves and, increasingly, monitor our security and health. The habits adopted during the pandemic aren’t just here to stay, they are gathering pace and reshaping the digital home.

The following trends are based on 2021 EY research across 5,000 US households to gain insight into consumer preferences, attitudes and behaviors toward the technologies, products and services that they interact with at home.

Mother and daughter with laptop in kitchen
(Chapter breaker)
1

Chapter 1

Barriers to digital adoption fall as necessity drives higher demand

As digital service adoption rates rise, find out how consumers view the impact on their well being.

From online food shopping to video calling and telehealth services, digital services adoption rates are significantly higher than before the pandemic. This trend, which saw new consumer segments access digital services for the first time out of necessity, appears to be long-lasting. For example, in telehealth services, utilization by US households almost doubled during the pandemic. Significantly, that ratio holds true for older, rural, and suburban dwellers as well as the young, tech-savvy urban households.

Understandably, lockdowns, combined with full-time remote working for many, led to consumers increasing both their TV and internet consumption, driving demand for fast and dependable service.

This “always-on” environment has consequences, however, including fatigue and concerns over consumer well-being – 46% say that COVID-19 has made them reconsider how the internet impacts their health and happiness. Many of these respondents are also struggling with managing work/life balance.

Key action for TMT companies

Meet the demands of changing consumer behavior while providing tools to manage screen time and promote well-being. 

Parents helping kids with homework
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2

Chapter 2

Reliability is the new foundation of the digital home, so build on it

Reliability over speed, but speed still matters. Find out why.

Given that the effects of the pandemic caused households to lean more than ever on connectivity, it’s no surprise that reliability is the number 1 factor for choosing a broadband provider, with 57% of respondents stating that dependability is more important than speed. Four of the top five reasons customers contacted their internet providers’ customer service were related to reliability issues. This is an area of opportunity for ISPs, with 61% of respondents considering switching if the quality of their broadband connections were guaranteed.

Speed also matters, but the message from providers needs to be clearer: 47% of respondents don’t fully understand the benefits of paying for a faster service or how higher speed tiers affect their internet experiences, presenting another opportunity for broadband providers to reinforce their value proposition.

With 5G mobile providers touting better speeds and lower latency compared to fixed broadband, consumers are becoming more inclined to explore mobile as their primary source of connectivity. Mobile also scores highly for reliability. However, consumers’ knowledge of 5G hasn’t improved much since last year, with less than half (45%) still unaware of its benefits and features. But 5G rollout and widespread availability is making it an emerging threat to broadband providers. One of the key takeaways here is that 5G providers still need to cut through complex jargon and focus on tangible benefits to stake their claim to the digital home. Broadband providers must address customer needs now more than ever if they want to stay ahead. 

To protect their market share, broadband providers need to clearly articulate their focus on reliability, consistency of service and value. They can further solidify their position by adding mobile to the customer bundle – a trend that is gaining strong traction in the marketplace as cable companies scale their complementary wireless offerings. More than a third (39%) of consumers feel that bundling their mobile and broadband makes sense, compared to 31% in 2019, with 25- to 44-year-olds the most enthusiastic about bundling (54%). Higher perceived value, rather than the simple convenience of a single bill, is the key driver.

Key action for TMT companies

Make reliability central to the customer promise, provide guarantees, tangible value and rapidly resolve issues. 

Series streaming on phone
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3

Chapter 3

Streaming has reached a tipping point, but there are still untapped opportunities

Find out how the rise of streaming platforms could trigger the reinvention of US cable TV.

It’s clear that the traditional linear video ecosystem is under significant pressure. Nearly half (45%) of respondents say that streaming is the primary way they watch films and TV shows at home, 61% believe that it offers better value and 39% are willing to cancel their pay-TV subscriptions to purchase solely from streaming providers. As streaming providers begin to focus on acquiring sports rights, consumers have another incentive to cut the cord. There is also a battle taking place between existing streaming companies, who accelerated subscription growth during pandemic lockdowns, and new, well-funded entrants to the streaming landscape with bold ambitions to take on the “digital native” platforms. 

But the race is far from over. In some ways, the rise of the streaming platforms is a reinvention of US cable TV, offering established players an opportunity to aggregate multiple offerings, providing consumers with the discoverability and ease of use they want, while also satisfying the everlasting thirst for rich and varied content. Accordingly, we will continue to see more pay-TV providers add streaming services within their bundles.

As the streaming market matures, it’s moving from an acquisition race to one based on the lifetime value of the customer. As a result, increasing subscriber retention is a key objective for streaming services, with pricing, content and user experience all key to long-term loyalty. This can play to cable providers’ strengths, allowing them an opportunity to apply their customer insights to stay on top by retaining their subscriber base, even as streaming companies both generate and own more and more content.

Key action for TMT companies

Aggregate platforms and services to offer households a simpler, more cost-effective route to streaming.  

Woman sitting on floor with tablet
(Chapter breaker)
4

Chapter 4

As customer service demands rise, self-service is key

Find out how self-service and predictive technologies can drive long-term retention.

As consumers rely more on connectivity, service issues have a greater impact on day-to-day activities. At the same time, expectations are rising, and TMT companies must now match up with the best customer service across all industries, not just in their class. Notably, it’s millennials – now aging into head of household roles – who are the most dissatisfied.

TMT providers risk losing subscribers as a result of bad customer service, with 80% of consumers saying that they will switch to a competitor after more than one negative experience. Demand for customer service is high – 43% of consumers contacted their home internet provider’s customer service department in the past 12 months – making online tools and self-service a viable scalable solution. The pandemic has helped in this respect, with 36% of survey respondents agreeing that, they feel more comfortable using self-service channels. This change is leading to a decrease in call center usage and a more engaged customer.

Providers are not meeting the high expectations set by Millennials

52%

of 25-44 (avg.,)

 

 

 

VS

37%

of 45-66+ (avg.,)

Millennials have contacted their broadband provider for issues in the past 12 months significantly more than older consumers

35%

of 25-44 (avg.,)

 

 

 

VS

17%

of 45-66+ (avg.,)

Millennials have more difficulty navigating their broadband/mobile providers website or app

Customer service improvement may prove a wise investment, with 35% of respondents willing to pay more for broadband in return for good customer service. Better service can also offer bundle providers an edge, with 58% of consumers believing that a single point of contact for customer services is a plus. This indicates a need for an omnichannel service strategy and state-of-the-art self-serve tools to cope with rising demand. Such tools can simultaneously add value, ensure loyalty and act as a key differentiator.

Key action for TMT companies

Tackle the inhibitors of digital support by investing in things like self-serve tools and predictive technology. This will help TMT players better anticipate and meet customer needs and demonstrate value to customers. 

Smart home control on tablet
(Chapter breaker)
5

Chapter 5

Prioritize simplicity and security to win in the smart home

Find out if self-service tools for troubleshooting the smart home should be the focus for TMT companies.

Smart home device ownership continues to grow and is expected to more than double between 2021 and 2026 across all categories, but security, sustainability and health-focused devices are set to gain the most ground.

Yet reservations persist, with 43% of respondents not yet confident in their ability to self-install smart home devices and 67% not deriving full value from the smart devices they already own. Others (41%) are wary about incompatibility between smart home devices. One of the biggest barriers to the smart home is the complexity and sheer variety of products and services being offered.

Security is also a big concern, with 67% of respondents worried about the ability of hackers to access their connected devices and over half (51%) think that smart home providers can’t make devices fully secure. Technology companies are the favored suppliers of smart home devices (21%), particularly among younger groups, closely followed by ISPs (17%), smartphone providers (14%) and household appliance providers (14%).

With 45% of respondents preferring to have all smart home devices controlled by a central ecosystem or application, there is an opportunity for smart home providers to become trusted integrators and aggregators. To maintain a competitive position in the market, TMT companies must provide the interconnected experience that consumers crave, while prioritizing security and simplicity. 

Key action for TMT companies

Help consumers by becoming their trusted one-stop provider for all things connected to the smart home.

Woman shopping online with credit card
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6

Chapter 6

As data and security concerns grow, tangible and clear privacy solutions are paramount

With privacy still top of mind, find out if consumers are more aware of privacy regulations.

Headlines about companies misusing data have left consumers feeling exposed, with 72% of respondents now very cautious about disclosing personal and financial information, even on websites they know and trust. The pandemic has also played its part, with 46% of respondents saying that it has made them feel more worried about the privacy and security of their data.

Yet, consumers have not gained any greater awareness of privacy regulations compared to last year, and they still lack confidence in their ability to control their data. Consumers are looking for ways they can increase their security by changing passwords more regularly and updating antivirus software on their connected devices.

Over half (57%) of all survey respondents say they would be interested in having privacy controls or security services bundled into their home internet packages. Content filters and security monitoring features within a mobile package were of interest to 61% of survey respondents.

The key point for providers, who are under increasing regulatory and public scrutiny, is to look beyond the technical aspects of security and address consumer concerns on an emotional level. It’s not enough for them to be safe, they need to feel safe. TMT companies must also be aware that data security and privacy concerns are restricting access to third-party data, making first-party data driven by customer engagement more important than ever.

Key action for TMT companies

Build next-level data security and privacy into products and communicate them effectively.  

The future of digital homes

TMT providers who get ahead of these trends can add real value for their consumers, while those who are complacent risk losing customers and staying power.  To achieve sustainable success, TMT providers should prioritize these key takeaways:

  • Meet the new demands of customers and solve emerging pain points to make the most of rising service adoptions and spending intentions.
  • Educate and inform customers on reliability, exclusivity, and performance to provide clearer information about how new services and upgrades drive consumer value – in unique ways against rival offers.
  • Build integration and aggregation into existing platforms to serve as the consumer’s one-stop provider for all things in the connected home, including streaming, connected devices and even mobile.
  • Invest from the start in security and privacy and communicate clearly on measures and product features that secure consumers’ data and connected devices at home.

Key action for TMT companies

Aggregate platforms and services to offer households a simpler, more cost-effective route to streaming.

Summary

Consumer preferences, attitudes and behaviors toward technologies, products and services and how we interact with them have seen a shift since the pandemic. Digital adoption, provider reliability, simpler and cost-effective streaming services, rising demand for self-service channels, reservations about the security of smart home devices and the subsequent need for clear privacy solutions are key trends observed in the 2021 EY Survey, covering 5,000 US households.

About this article

Authors
John Harrison

EY Americas Media & Entertainment Leader

Transformative leader with a passion for media and entertainment. Identifying the opportunities afforded by convergence and disruption. Executing strategies to succeed in a fast-moving market.

Vincent Douin

Consulting Customer Principal, TMT sector, Ernst & Young LLP (EY)

Twenty years in telecom and cable. Enthusiastic advisor through the business and digital transformations of my clients.

Amritha A Joseph

Manager, Consulting, Ernst & Young LLP

Media professional and data analyst passionate about using customer data and market research to explain and influence consumer behavior. Enjoy writing about travel, food and finding fulfillment.

Paul Demascus

Manager, Business Transformation, Ernst & Young LLP

Consultant with a focus on growth strategy, go-to-market strategy and marketing transformation in the TMT space.

Related topics TMT Media and entertainment