Close attention to the changes in the dynamics of bundled services — via data provided by Parks Associates’ Home Services Dashboard report — may offer competitive advantages to those broadband providers offering similar packages.
A couple of things are apparent, according to the Parks Associates bundles report: Average revenue per user (ARPU) is increasing while the take rate of bundled services has declined a bit.
The firm found that bundling two, three, four, or five services together all generated more revenue in the third quarter of last year compared to the third quarter of 2023. The Parks report tested bundles including mobile plans, pay TV with live TV channels, home phone, and professionally monitored security.
The report, based on a study of 8,000 households, found that bundles with the most growth included home phone service.
The research showed that overall adoption of bundles with value-added services declined: During the third quarter of 2024, 57% of U.S. households had a value-added bundle — a decrease from 61% during the third quarter of the previous year.
The Parks Associates report found that traditional bundles are declining due to the lagging adoption of home phone and traditional pay-TV services and that the shift in value-added services is due to consumer attraction to less expensive, barebone internet service plans.
“Bundling serves a valuable role in increasing customer satisfaction and loyalty, while also driving up ARPU in a way that benefits the customer,” said Parks Associates’ Research Director Kristen Hanich. “Consumers tend to get better pricing with bundled services than with separate ones. Decreasing adoption of value-added service bundles suggests growing price sensitivity as well as some customers willing to go without.”
Last June, Innovative Systems’ Annual Rural Broadband, Video, and Social Media Report found that bundles of internet and TV services can boost monthly ARPU.
The report showed that customers spend an average of $69 every month on Internet connectivity alone. They also spend an average of $115 every month on TV services, for a combined total of $184 monthly. Customers who bundle their internet and TV spend $167 monthly, an average savings of $17 every month.
