'Customers at the Gate': Broadband Applications and Services Highly Sought; Sage Research Releases New Study of U.S. Consumers.Business/Technology Editors NATICK, Mass.--(BUSINESS WIRE)--Feb. 13, 2002 Potential Demand for Internet-Delivered Services Sized at $25 billion The first comprehensive survey of Internet-delivered services that U.S. households want, conducted by Sage Research, Inc., reveals that many consumers are willing to pay for education, entertainment and communications services that high-speed, always-on broadband connections See broadband and wireless broadband. can deliver. The study, "Customers at the Gate: Mounting Demand for Broadband-enabled Services," found that 44% of U.S. households are willing to pay for entertainment services, 42% for communications services, and 39% for education services. "While our hypothesis going into the research was that we would find demand for a variety of entertainment, education, and communications-related services," said Kathryn Korostoff, Sage's President, "even we were astounded a·stound tr.v. a·stound·ed, a·stound·ing, a·stounds To astonish and bewilder. See Synonyms at surprise. [From Middle English astoned, past participle of astonen, by how many households reported willingness to pay Willingness to pay (WTP) generally refers to the value of a good to a person as what they are willing to pay, sacrifice or exchange for it. See also
When U.S. households were asked to report how much -- if anything -- they would be willing to pay for a wide variety of broadband- delivered services (such as long distance telephony, unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. , continuing education continuing education: see adult education. continuing education or adult education Any form of learning provided for adults. In the U.S. the University of Wisconsin was the first academic institution to offer such programs (1904). , and movies on demand), many reported interest in more than one type of service. The research also shows that many of the services with broadest appeal are those most likely to have a high degree of multimedia content. For example, 15% of U.S. households would pay for continuing education. Delivered over the Internet, continuing education would typically include video (for example, lectures) and even application sharing A data conferencing capability that lets two or more users interactively work on the same application at the same time. The application is loaded and running in only one machine; however, keystrokes are transmitted from and screen changes are transmitted to the other participants. (for example, to simulate a classroom or study group environment). "The willingness of U.S. consumers to pay for services that broadband can deliver presents a challenge and an opportunity," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Laura Ipsen, Vice President of Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Worldwide Government Affairs. "Consumers must have true broadband of 1.5 Mbs and above to achieve the real benefits of these emerging multimedia applications," Ipsen said referring to such applications as e-learning, videos-on-demand and video-conferencing. According to accepted data, most U.S. Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f operate using dial-up and only 10% have DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary or cable. "Today, home U.S. broadband is about at 256 Kbps," said Ipsen. "Speeds of at least five times greater than that are going to be required for an enjoyable consumer experience." In addition to identifying which services U.S. households are willing to pay for, the study also examines how much they are willing to pay per service. For example, the study found that the most common price consumers are willing to pay for an Internet-delivered unified messaging service is $10 per month. As another example, the most common price consumers are willing to pay for Internet-delivered movies on demand is $5 per movie. The calculation of a $25 billion annual potential is estimated based on the percent of households likely to buy each service multiplied by the most common price they are willing to pay. "The amount people are willing to pay for Internet-delivered services is really quite reasonable in most cases," said Korostoff. "That said, for some services, the amount they are willing to pay is less than for non-Internet alternatives." For example, the amount most are willing to spend per college credit for an online continuing education class is $50 -- certainly less than what they would pay at a conventional college. The challenge this creates is that to build a sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. model, some services would need to be provided on a volume basis. Since most of these services, such as continuing education, require broadband access See broadband and wireless broadband. for a satisfactory customer experience, building such a volume will be difficult. Until broadband access is widely available to U.S. households, the number of potential customers for these services will be limited. For this groundbreaking study, commissioned by Cisco Systems, Inc., 600 U.S. households were surveyed. The sample was carefully designed to ensure the results would be representative of average U.S. households based on actual U.S. census data. The complete results are available in a white paper (www.sageresearch.com/broadband.pdf), which also details the research methodology. The specific service concepts tested within each of seven general categories were: 1. Entertainment including simulation games A simulation game, or sim game, (also known as a game of status or mixed game) is a game that contains a mixture of skill, chance, and strategy to simulate an aspect of reality, such as a stock exchange. , kids activity site, TV show simulations, music libraries, online gambling Online gambling is a general term for gambling using the Internet. This article provides a brief introduction to some of the forms of online gambling, as well as discussing general issues. , TV shows on demand, movies on demand, concerts, and cultural events. 2. Communications including videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems , unified messaging for personal purposes, and international long distance/telephone. 3. Education including language education, music education, cooking education, continuing education, and multimedia encyclopedias. 4. Medical/health including video monitoring of child's daycare, video monitoring of older relative's care facility, and home health monitoring. 5. Hobbies including interior decorating services, multimedia sports fan service, multimedia cooking lovers service, multimedia fitness enthusiasts service, and access to religious services/resources. 6. Personal/professional Services including online clothes shopping service, counseling/psychiatric services, legal advice, marriage/parenting advice, home/auto care advice, multimedia travel planning, investment advice, online dating service, and online photo editing/printing/storage service. 7. Telework/work including access to employer's network and unified messaging for work purposes. For more information about the white paper, "Customers at the Gate: Mounting Demand for Broadband-enabled Services," please visit www.sageresearch.com/broadband.pdf, or contact Sage Research at 508/655-5400. About Sage Research Sage Research, Inc. is a full-service market research firm providing demand-side research on information technology markets. The firm combines expertise in both qualitative and quantitative research Quantitative research Use of advanced econometric and mathematical valuation models to identify the firms with the best possible prospectives. Antithesis of qualitative research. methods with an in-depth knowledge of technology markets. Since 1993, Sage Research has delivered reliable data, insightful analysis, and actionable recommendations to industry leaders and innovative start-ups. For more information, visit www.sageresearch.com. |
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