Press release
14 Sep 2023  | London, GB

EY study: consumers are still spending on digital home products and services despite cost-of-living crisis

Press contact

  • Just 16% of survey respondents have reduced or plan to reduce expenditure on home broadband, mobile connectivity or streaming
  • Value-for-money perceptions remain positive; premium service appetite grows
  • Pain points persist: 26% still regularly experience unreliable internet access

Less than one in five digital households (16%) have reduced or plan to reduce their spending on home broadband, mobile connectivity or streaming according to the latest EY Decoding the digital home study – which surveyed more than 21,000 consumers on their attitudes toward technology, media and telecoms experienced in the home across eight countries: Canada, France, Italy, South Korea, Spain, Sweden, the UK and the US. Less than a third (32%) have not taken any measures cited in the study to reduce spending on connectivity content and home technology in response to the cost-of-living crisis, rising to 49% in the UK.

Despite growing concerns among some households about rising broadband and streaming/pay-TV prices (cited by 63% and 60% respectively), perceived value-for-money remains consistent year-on-year and has risen substantially in relation to content from broadband providers (51%, up from 41% last year) and smart home products (40% vs. 34% last year). Perceived value for money for broadband provider content is highest in the US (60%) and the UK (55%).

This positivity is compounded by increased enthusiasm for premium broadband offerings, with consumers increasingly willing to pay more for good customer service (up 6% year-on-year to 36%) and back-up connectivity (also up 6% to 35%). Turning to streaming services, 40% of respondents would be willing to pay more to access all content via a single platform, rising to 50% in the US and 51% among 25- to 34-year-olds across all markets.

Tom Loozen, EY Global Telecommunications Leader, says:

“Consumers are reprioritizing as society adapts to hyper-inflation, yet broadband and connectivity offerings have in many ways weathered the storm. Improved value perceptions are encouraging for connectivity providers, suggesting their bundle propositions are resonating well. This is not only intensifying competition but presents huge opportunities for providers that can differentiate themselves by offering superior customer service and network reliability through the lens of simplified packages that appeal to all demographics.”

Uptake of new services and smart home tech stalls

While the study highlights the resilience of the digital home, new services and emerging smart home products are still challenged by the pressure on household spending. Nearly half of households say the economic climate has made them less likely to pursue new connectivity and content experiences (43%) and adopt new technologies and gadgets for the home (48%). And 56% say pressure on finances has made them more likely to shop around for the best connectivity or content deals.

Similarly, penetration rates of more sophisticated home tech remain low. None of the 17 devices or products featured in the study (including smart security and digital home assistants) are currently owned by more than one in five households, and adoption levels are only increasing slightly year-on-year. Notably, attractive pricing is the No. 1 factor influencing consumers when choosing a smart home device (40%), with trust in the brand ranking closely behind (39%).

Platform overwhelm in a competitive streaming market

Competition between streaming services continues. As more services enter the market, there are signs of decision fatigue with 54% agreeing that they are faced with too much choice across platforms. Meanwhile, 20% of streamers indicate that they have canceled at least one monthly subscription in the previous 12 months, with 13% planning to cancel one or more in the future. The competitive landscape and spending pressures both feed into these decisions, with 45% citing cost savings as a reason to cancel, while 31% cite inadequate content or preference for alternative streaming services.

Network reliability fails to show material improvement

The study further highlights that network reliability continues to be a key pain point for consumers. More than a quarter of respondents (26%) say they experience an unreliable home broadband connection, down only slightly from 28% in each of the preceding two years. Perceptions around mobile data are more concerning: despite increasing 4G and 5G coverage levels, 29% indicate that they experience an unreliable mobile connection often or very often – up from 24% (2022) and 22% (2021). Overall, a third of households (33%) rank improving the reliability of their connection as the biggest service improvement their provider could make.

Adrian Baschnonga, EY Global Technology, Media and Telecoms Lead Analyst, says:

“Streaming providers need to be as agile as possible when pricing and positioning their packages if they are to cut through an increasingly crowded landscape. Meanwhile, connectivity providers should take steps to address persistent issues around reliability, whether by educating customers around how to maximize signal strength or providing more proactive support during network outages. Better levels of brand trust will be critical to smart home providers if they are to accelerate adoption of new technology for the home.”

                                                                                              -ends-

Notes to editors

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets.

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate.

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About the study

The EY Decoding the digital home study is based on an online survey conducted for the EY Global Technology, Media & Entertainment, and Telecommunications (TMT) team of 21,000 households in Canada, France, Italy, South Korea, Spain, Sweden, the UK and the US. It was conducted in February and March 2023, updating our previous annual surveys of multiple markets.

The survey is designed to understand changing consumers’ changing behavior and attitudes in relation to technology, media and telecommunications products and services. Our latest findings focus on topics such as the impact of the cost-of-living crisis, the appetite for service bundles, and changing customer journeys, also providing specific insights relating to connectivity, content and smart home technology. Additional thinking, insights and analysis are provided by the EY Global TMT team.
 

Related news

The emergence of GenAI is reshaping the 2024 telecoms risk radar

LONDON, 30 NOVEMBER 2023. Changing imperatives in privacy, security and trust emerges as the top risk facing telecoms companies in 2024.

Businesses favor gradual adoption of GenAI as they look to address knowledge gaps

LONDON, 15 FEBRUARY 2024. The latest EY Reimagining Industry Futures Study confirms generative AI’s (GenAI) status as a breakthrough technology, with 43% of the 1,405 enterprises surveyed investing in it.

EY study: consumers are still spending on digital home products and services despite cost-of-living crisis

LONDON, 14 SEPTEMBER 2023. Less than one in five digital households (16%) have reduced or plan to reduce their spending on home broadband, mobile connectivity or streaming according to the latest EY Decoding the digital home study – which surveyed more than 21,000 consumers on their attitudes toward technology, media and telecoms experienced in the home across eight countries: Canada, France, Italy, South Korea, Spain, Sweden, the UK and the US.

Sustainability is driving the emerging tech investment agenda

LONDON, 15 FEBRUARY 2023. The fourth edition of the EY Reimagining Industry Futures Study reveals that enterprises’ emerging tech investment decisions are increasingly driven by sustainability and ESG goals.

Failure to respond to rise in cost-of-living tops telecoms risk radar

LONDON, 30 NOVEMBER 2022. The rise in the cost-of-living has driven consumers to re-adjust spending priorities.

EY announces alliance with MoneyLion to help banks accelerate their digital transformation and extend financial services

LONDON, 6 February 2024. The EY organization today announces an alliance between MoneyLion Inc. (NYSE: ML), a leading enterprise and consumer FinTech company, and Ernst & Young LLP (EY US), to help drive innovation and growth within the banking sector.

EY announces alliance with Reveal to offer clients AI-powered solutions to advance data discovery and compliance needs

LONDON, 29 JANUARY 2024. The EY organization today announces a global alliance with Reveal Data Corporation, a global provider of leading artificial intelligence (AI)-powered eDiscovery – a review and investigations platform that helps clients better manage their data discovery needs using automation and deep analytics.

EY and ServiceNow expand strategic alliance to provide solution for GenAI compliance, governance and risk management

NEW YORK, 24 JANUARY 2024. The EY organization and ServiceNow (NYSE: NOW), leading digital workflow organizations making the world work better for everyone, have announced an expansion of their strategic alliance to provide solutions for generative artificial intelligence (GenAI) compliance, governance and risk management.

Multiple crosswinds superseded global IPOs despite market rally in 2023

London, 14 December 2023. The Global IPO market closed 2023 with 1,298 IPO raising US$123.2b.

Tech industry outlook brighter than 12 months ago, with GenAI emerging as top opportunity for 2024

LONDON, 7 DECEMBER 2023. Following a challenging start to 2023 for the technology sector, characterized by macroeconomic weaknesses and cost-savings, company strategies centered on generative artificial intelligence (GenAI) have triggered a rebound in confidence.

EY announces alliance with Moody’s to bring together software, data and services to help improve how clients measure and manage risk

LONDON, 07/12 2023 . The EY organization today announces an alliance between Moody’s Analytics, Inc. (Moody’s), a provider of industry-leading financial intelligence and analytical tools, and Ernst & Young LLP (EY US), to help organizations make better data-driven business decisions and manage risk.

EY announces alliance with Aspen Technology to support clients’ sustainability initiatives, improve manufacturing operations and modernize utility grids

LONDON, 27 NOVEMBER 2023. The EY organization today announces an alliance between Aspen Technology, Inc. (NASDAQ: AZPN), a global leader in industrial software, and Ernst & Young LLP (EY US).

EY announces strategic alliance with BlueVoyant to help enterprises deploy Microsoft 365 E5 advanced security tools

LONDON, 20 November 2023. The EY organization today announces a strategic alliance between BlueVoyant, a leading cyber defense company, and Ernst & Young LLP (EY US) to provide proven cyber risk management design.

Businesses revise climate targets as reality of long-term sustainability transformation hits

LONDON, 16 November 2023 – The EY organization today announced its participation in the Microsoft Security Copilot Partner Private Preview.

EY launches ‘The Face of the Future,’ a creative marketing campaign that puts people at the center of AI to boost confidence

LONDON, 30 October 2023 – The EY organization (EY) today announces the launch of a new and fully integrated marketing campaign entitled “The Face of the Future.”

Cyber leaders’ confidence in their organization’s defenses plummets, but costs mount

LONDON, 24 October 2023. CEOs globally recognize the potential of artificial intelligence (AI), but most are encountering significant challenges in formulating and operationalizing related strategies, according to the latest EY CEO Outlook Pulse survey.

EY wins 2023 CrowdStrike Global System Integrator of the Year award

London, 23 October 2023. The EY organization today announces that it has been named as the 2023 CrowdStrike Global System Integrator of the Year during the Partner Summit of Fal.Con 2023. This annual conference recognizes organizations that have consistently built successful client relationships, as well as delivered innovation and business outcomes leveraging the CrowdStrike Falcon® platform.

EY announces first enterprise user to leverage EY Blockchain’s SaaS platform using fourth generation EY Blockchain Analyzer: Reconciler

London, 17 October 2023. The EY organization today announced that the fourth generation of EY Blockchain Analyzer: Reconciler, which supports organizations’ needs to derive wallet addresses and query on-chain data from an independent third party to augment internal risk management.

EY and IBM launch artificial intelligence solution designed to help increase productivity and drive efficiencies within HR

LONDON, October 10th 2023 - The EY organization and IBM (NYSE: IBM) today announced the launch of EY.ai Workforce, an innovative HR solution that helps enable organizations to integrate artificial intelligence (AI) into their key HR business processes.

EY and Microsoft expand social impact collaboration and advance sustainability education worldwide with Green Skills Passport

LONDON, October 2, 2023 – Today, the EY organization and Microsoft announce the launch of Green Skills Passport, which helps learners aged 16 and over develop skills to find green jobs and pursue opportunities in the growing green economy.

Global IPO market: Investor appetite shifts from growth to value amid tighter liquidity

London, 28 September 2023. Globally, the first three quarters of 2023 recorded 968 IPOs with US$101.2b capital raised, a 5% and 32% decrease year-over-year (YOY), respectively.

EY announces launch of artificial intelligence platform EY.ai following US$1.4b investment

LONDON, 13 SEPTEMBER 2023 – The global EY organization (EY) today announces the launch of EY.ai, a unifying platform that brings together human capabilities and artificial intelligence (AI) to help clients transform their businesses through confident and responsible adoption of AI.