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To succeed in the fast-evolving digital home, providers must differentiate themselves in the eyes of their target consumers. Here’s how.
In brief
Consumers are seeking greater certainty and clarity across multiple aspects of the digital home, including pricing, value for money, performance and security.
Consumers are splitting into distinct segments, with differing attitudes in areas like paying a premium, customer support satisfaction and switching propensity.
Providers that can differentiate their value propositions and build greater trust with customers will have an edge in a crowded market.
In an increasingly competitive marketplace for digital home, and amid continued financial pressures on households, consumers are focused on getting value for money from their spending on in-home connectivity and content. The EY Decoding the Digital Home Study 2024 finds that many are confused by the widening choice of products and services available to them and becoming more concerned about the potential downsides of digital usage.
As these trends and more play out, the consumer base is fragmenting into different personas, each with their own perceptions and priorities towards the digital home. We’ll explore these segments below. But first, here are five insights from this year’s findings.
The EY Decoding the digital home 2024 study is based on an online survey conducted for the EY Global Technology, Media & Entertainment, and Telecommunications (TMT) team. The study surveys 20,000 households in total across Canada, France, Germany, Italy, South Korea, Spain, Sweden, Switzerland, the UK and the US. It was conducted in July and August 2024, updating our previous annual surveys of multiple markets.
Download the EY Global Digital Home Study Report 2024
Understand changing consumer behavior and attitudes in the digital home.
1. Smart home adoption risks stalling as broadband and content face growth barriers
While performance needs continue to drive broadband purchase decisions, network reliability remains a pain point — with 26% of households overall still experiencing unreliable home internet, despite ongoing network upgrades. Meanwhile, adoption appears to have peaked for some smart home devices, with consumers voicing concerns over data security, costs and convenience, challenges that threaten to limit further adoption of connectivity and content offerings as well.
This chart shows respondents attitudes to the further adoption of connectivity, content and smart home technology. For connectivity, 50% of respondents don’t think upgrading to a higher speed package is worth it, 42% believe the WiFi promises made by providers are misleading or inaccurate and 36% find it frustrating that broadband packages offering the fastest speeds are unavailable in their area. For content, 52% believe their TV or streaming provider could improve the relevance of content they recommend, 50% believe they pay too much for content they don’t watch and 36% find it difficult to track the availability of their favorite content across multiple platforms. For smart home technology, 57% are concerned about hackers accessing their connected appliances, 46% believe smart home devices don’t provide enough convenience to justify the cost and 46% worry about the lack of compatibility between devices from different providers.
2. Spending and value for money are in focus but premium appetite also exists
Consumers’ anxiety over price increases remains pronounced, with clear demand for fixed price guarantees. Some consumers are willing to trade down, but others are alert to premium offerings — with receptivity to paying a premium for content aggregation rising to 44% from 40% last year, and 38% prepared to pay more for broadband that comes with security and digital well-being features.
This chart shows how receptive respondents are to paying a premium for certain types of content, technology and connectivity. On content and technology, 44% of respondents are willing to pay more for a single platform that aggregates all their TV and video content, 35% are willing to pay to watch sport, 32% would pay a premium to watch TV without ads, 31% would pay a premium to receive Super HD/4K content and 30% would pay a premium to get new tech and gadgets before anyone else. For connectivity, 40% of households are willing to pay a premium for an unlimited mobile allowance, 38% are willing to pay more for broadband in return for privacy, security and wellbeing features, 37% would pay more for broadband in return for good customer service, 36% are willing to pay more for broadband in return for back up connectivity and 33% are willing to pay a premium for a 5G mobile plan.
3. There are growing worries over the downsides of digital usage
Consumers’ misgivings over the amount of time they spend online is making them increasingly keen on a “digital detox” amid growing concerns over harmful content — with 60% very concerned about children accessing harmful content — and the potential of artificial intelligence (AI) to damage trust in online content. Connectivity providers have an edge over other entities as perceived data custodians, but this advantage is less pronounced among younger users.
This chart shows the percentage of households who are concerned about members of their household encountering harmful content while online. In 2022, 38% of households were concerned, in 2023 that grew to 44%, and in 2024 it has increased again to 47% of households.
4. Attitudes to value propositions are diverging as consumers look for clarity
While the cost-of-living crisis has increased consumers’ focus on buying bundles of connectivity and content, more than one third of households (35%) would be willing to drop fixed broadband for a mobile alternative with a compelling price point and performance promise. These ambivalent attitudes are accompanied by feelings of overload – with more than half of households believing there is too much choice of broadband bundles (53%) and streaming platforms (55%) – while 44% see very little or no difference between broadband provider offerings.
This chart shows the percentage of households who due to the cost-of-living crisis, consider it would be better to get all of their connectivity and content services from a single supplier. The chart compares answers from 2023 and 2024. In all 10 markets the number of households considering getting their services from a single supplier has risen between 2023 and 2024, with the global average being 40% in 2023 rising to 44% in 2024.
5. Attachment to traditional customer journeys is strong — and AI must be explained
Standing out from the crowd is a challenge: 44% see very little difference between connectivity providers. Four in 10 consumers still prefer going to physical stores first on the path to purchase — and half favor the call center for customer support. What’s more, chatbots are regarded as cumbersome: Households want digital tools that blend agent advice alongside better explanations of the role of AI in sales and support interactions.
This chart shows the percentage of households who believe that connectivity and content providers should provide better explanations of how they are using AI in their customer interactions. The highest percentage is in the US 68%, followed by Canada 67%, South Korea 66%, Spain and UK equally on 65%, Germany and Switzerland on 59%, Italy 57%, France 56% and Sweden the lowest with 52%. The average across all markets is 61%.
Diverse attitudes in the digital home: the seven digital home personas
Our analysis of the findings has revealed seven distinct consumer segments, each with its own distinctive attributes, attitudes and priorities around digital home products and services:
Premium and pleased: These affluent, urban consumers are most likely to be male and the sole decision-maker in their household, and to pay a premium for home connectivity, content and technology. However, they’re also very attracted by introductory offers. And while they find self-service options helpful, they have the highest readiness to pay more for better customer service. As a proportion of the customer base, this segment is most prominent in the US (16%) and the UK (14%) — and least prominent in France (7%). Service providers should take care to refresh their premium propositions regularly, since this group is alert to incentives to change providers.
Digital devotees: More likely to be female and aged 45 to 54 than other personas, consumers in this segment exhibit high levels of smart home adoption and are the most likely to have multi-device streaming at home. They’re also the most concerned about children accessing harmful content and think service providers should improve their price guarantees. They also rely on the call center for support. They’re strongly focused on WiFi quality, seeking improved reliability from broadband providers and better-quality chatbots for customer service. This segment is biggest in Sweden (27%) and South Korea (26%), and smallest in Germany (13%). Service providers should make sure their customer promises and digital support tools stand up to scrutiny from these demanding but loyal customers.
Informed savers: These older consumers spend as little as possible on connectivity services, ranking above average for value for money perceptions and satisfaction with overall services and customer support. They also have a below-average propensity to switch providers. Their savviness is reflected by the fact that they’re the least likely to find switching painful or pricing changes difficult to understand, and they exhibit above-average sensitivity to privacy, security and AI risks. Their biggest share of the consumer base is in France (18%), and their smallest in Switzerland and the US (both 11%). Service providers targeting this value segment should ensure attractive price points are accompanied by strong security credentials.
Content comes first: These consumers are more likely to be male and the most likely to pay to watch sport on TV — but also think they overpay for content they don’t watch. They have a higher propensity than other personas to find the switching process complex and are the least likely to trust broadband providers to look after their data. Preferring familiar content, they’re sensitive to digital overload, preferring to seek time away from smartphones. They’re the largest segment in Italy (19%) but the smallest in Sweden (10%). Service providers should take care to reduce friction in customer journeys for this group, while ensuring their content propositions remain clear and compelling.
Beyond the bundle: Exhibiting above-average interest in new technology or gadgets, and a high likelihood to pay a premium, these relatively young and affluent consumers have the highest propensity to switch. They state below-average satisfaction with their broadband providers and support experiences and are the most likely to want to cancel pay TV, moving to subscription video-on-demand only. They’re also the most receptive to exchanging personal data in return for tailored services, and the most worried about the negative impacts of being online on their well-being. Their highest consumer share is in the UK (15%) and lowest in Switzerland and Italy (both 10%). Better options to self-serve and customize hold the key to this group, who tend to look beyond traditional forms of service bundle and package.
Disengaged users: While these consumers have average levels of home technology adoption, they’re the most likely to perceive a lack of differentiation between providers. They voice below-average perceptions of value for money, and below-average satisfaction with overall services and customer support – both contributing to an above-average propensity to switch. But they’re the least receptive to introductory offers and bundling propositions. Their numbers are largest in Switzerland and Germany (both 17%) but smallest in South Korea (9%). Service providers should ensure their value propositions are clear and compelling to make the most of this group’s latent demand and needs.
Drowning in digital: The segment with the highest average age and most likely to live in rural areas, these consumers are the least likely to pay a premium, and the most likely to feel overwhelmed by the breadth of choice in the digital home market. Their resulting inertia is reflected in a below-average propensity to switch, despite low satisfaction with connectivity and content providers. They’re the most concerned about phishing or scam emails, and the least likely to feel in control of their online data. They’re the biggest segment in France (23%), but the smallest in the US (11%). Simpler products and services are vital for this group, backed by better levels of assistance during sales and support interactions.
This chart shows the percentage of each digital household segments in each county. The digital household segments are: “Premium and pleased”; “Digital devotees”; “Informed savers”; “Content comes first”; “Beyond the bundle”; “Disengaged users” and “Drowning in digital”. The highest percentage of the “Premium and pleased” segment are in the US (16%) and the lowest in France (7%). The highest percentage of “Digital devotees” are in Sweden (27%) and the lowest in Germany (13%). For “Informed savers” the largest percentage are in France (18%) and joint smallest percentage are in the US and Switzerland (11%). For the “Content comes first” segment, the largest percentage are found in Italy (19%) and the smallest in Sweden (10%). The “Beyond the bundle” segment is largest in the UK (15%) and smallest in Switzerland (10%). “Disengaged users” have the joint largest percentage in Switzerland and Germany and the smallest in South Korea (9%). The “Drowning in digital” segment have the largest percentage in France (23%) and the smallest in the US (11%).
Next steps for service providers
In light of our survey results, here are five steps that we believe digital home service providers should take as a matter of urgency to set themselves apart in the marketplace.
Focus on your customer promise — ensure service guarantees are credible, meaningful and compelling. This will help address ongoing frustration among some segments and improve the adoption outlook for connectivity, content and smart home technology.
Take advantage of premium service potential — maximize consumers’ rising receptivity to premium connectivity and content offerings. Enhanced features that that are well-designed will help you justify higher price points during a period of rising subscription rates across the market.
Address consumers’ digital anxieties — build higher trust through a more meaningful dialogue with customers. Prioritize proactive dialogue with industry peers and regulators so that you stay responsive and credible on fast-changing issues such as online safety and harmful content.
Put simplicity at the center of your service portfolio — make your service offerings easy to understand, install and customize. This will help you cut through a crowded market and ensure that service bundles deliver on their promise, while helping you resonate with segments that find the digital world overwhelming.
Instill greater confidence in digital customer journeys — improve the appeal of digital tools for purchasing and support and provide better-balanced combinations of agent and digital interactions. This will help wean some customers off traditional support channels where appropriate, while unlocking better experiences for those already keen to self-serve.
Summary
While the digital home now plays a central role in the lives of countless millions of consumers worldwide, our research confirms that providers face significant headwinds in their efforts to drive future adoption and growth. We believe the solution lies in gaining a deeper understanding of changing attitudes, needs and expectations across the various consumer segments, and meeting these through offerings that deliver the combination of attributes they’re seeking — not least of which include reliable performance, clear pricing and robust security.
