JD Power: Digital Lifestyle Raises Churn Concerns

As the popularity of Internet entertainment services grows among consumers, digital lifestyle providers face customer retention challenges and seek to extend bundled service offerings, according to the J.D. Power 2013 Digital Lifestyle Study.The study, now in its second year, examines consumer brand loyalty, propensity to subscribe to digital lifestyle products and preferences for aggregation of a wide array of services from one provider. Referred to as a digital lifestyle service package, it includes such entertainment components as video, audio and gaming; monitoring components, including home security, energy management and healthcare services; communication components, such as voice, Internet and wireless; and such other components as data backup and smart appliances.The study indicates that:

• Consumers most often choose Internet service to include in a bundle, followed by voice and video, respectively.



• Consumers intend to bundle voice services, despite available alternatives.



• Consumers are receptive to home healthcare services.



• Younger consumers are most likely to share personal information, but expect free services in return.

"As the cost of subscription-based television increases and the speed and reliability of mobile broadband attracts a younger generation, consumers are more selective when choosing an entertainment and communications service provider," said Kirk Parsons, senior director of the telecommunications practice at J.D. Power. "Customer retention and acquisition are critical issues faced by telecom providers. To remain competitive, they are now offering bundled Internet-based services, such as home security, in order to provide additional value to a wide variety of consumer segments."