2020 U.S. Internet, TV, & Phone Shopping Study

2020 U.S. Internet, TV, & Phone Shopping Study

Written by March 16, 2020

Our annual study covering U.S. shoppers of internet, TV and phone services comes during a period of great change due to the COVID-19 pandemic. With a sudden shift toward telecommuting, home-schooling, and telehealth, broadband internet and other home services are more essential to American life than ever.

As of March 16th, visitors to BroadbandNow are up 20 percent in March, 2020 compared to March, 2019 as consumers are increasingly focused on home internet given recent events. The FCC recently urged ISPs to remove data caps, and several dozen ISPs, including AT&T and CenturyLink, have done so thus far. We estimate that more than $90 billion in consumer spending will shift between providers of these home services (internet, TV, phone) as consumers shop for additional or replacement services.

As in the 2019 Study, our goal is to gauge market penetration, purchase behavior and reasons for purchasing or switching across these home service verticals over the past 12 months. With Americans increasingly dependent upon broadband internet for work, commerce and entertainment, and the debut of new services like Disney+, 5G mobile service and Youtube TV, we find that consumer purchase behavior is shifting faster than ever. Our point of view, based on our most recent data, is that this pattern will continue throughout the year.

In last year’s report, we found that 16 percent of the population (around 20 million households) added or switched home services in 2018. This year, the number has increased dramatically to 36 percent. When we include streaming TV services, new in this year’s report, the number balloons to 73 percent of the population, or 93 million households. This equates to more than $90 billion in consumer spending across providers in these industries, annualized. Note in the table below that some households are counted in multiple rows as they purchased or switched multiple services.*

Category No. of Households who Shopped Avg Price of Service per Month Amount of Money Changing Hands in Market*
Cable/Satellite TV 26.58 million $65 $20.74 Billion
Streaming Services 80.94 million $15 $14.57 Billion
Internet 25.86 million $79 $24.52 Billion
Mobile Phone 22.37 million $99 $26.57 Billion
Landline Phone 8.85 million $42 $4.46 Billion
TOTAL $90.86 Billion

* Assumes 128.58 Million Households in 2019 on a new service for 12 months

Data for the study comes from anonymized shopping and/or sales data from millions of consumers and customer sentiment data from 559 home-services decisionmakers (see about our data)

Key-Findings

  • We found that 36 percent of consumers added at least one new home service (internet, TV, and/or phone) purchase in 2019. When streaming services were factored in, this number ballooned to 73 percent.
  • Comparing March 2020 to March 2019, we are seeing increased consumer interest in broadband internet as evidenced by visitors to BroadbandNow and rise of telecommuting, home-based schooling and telehealth in recent weeks.
  • Pricing was the main motivation cited for consumers changing services across all categories. Even so, as many as one-third of consumers were shopping for better quality products, indicating that providers can differentiate on quality in a meaningful way.
  • Phone service shoppers indicated that they were the most concerned with price as a motivating factor when choosing a new provider.
  • Consumer satisfaction has increased overall year over year across all categories, but especially for TV and phone services.
Service Category Avg Satisfaction 2019 Survey converted from a 10 point to 100 point scale Avg Satisfaction 2020 Survey out of 100 points
TV 67 75
Internet 67 71
Phone 71 77

We found that streaming subscription market penetration is now on par with residential internet adoption. The points to the possibility that streaming service growth is tied to an increase in broadband availability, due to its reliance on a connection that can support content streaming in the first place.

Service % Ownership % New Subscribers^ Avg Satisfaction out of 100 points
Cable or Satellite TV 65.47% 31.58% 66
Streaming TV 88.27% 71.31% 81
Internet 88.61% 22.70% 71
Mobile Phone 95.11% 18.29% 79
Landline Phone 26.99% 25.50% 69

^Includes switchers, and consumers that have added a second service (e.g. added Disney+).

Internet

Twenty-three percent of residential internet service customers indicated that they changed their service provider in the last year, contributing to the over $24 billion that changed hands in this time period.

For consumers who made the decision to switch service providers, their primary motivation seems to be finding a better price elsewhere. Forty-five percent of responses included pricing as a reason for switching. This was closely followed by the 41 percent of consumers who indicated that they switched providers due to moving and nearly one-third of consumers indicating they are seeking better quality internet connections.

Reasons for Purchasing new Internet Service
I wanted a better price 45.05%
I was moving 40.54%
I wanted a better quality service 31.53%
I did not already have service 13.51%
I wanted better customer support 9.01%
I wanted more features 7.21%
Other Reasons 1.80%

Fiber customers were the most satisfied with their internet service, followed closely by cable, and then fixed wireless. This is consistent with our findings in last year’s study. Notably, in our previous study we found that satellite subscribers were less satisfied than those with DSL, which shifted this year.

Type of Internet Technology Average Satisfaction out of 100 points
Fiber 75
Cable 72
Fixed Wireless 72
Satellite 70
DSL 63

The majority of consumers who purchased a new internet service package in 2019 selected one with download speeds ranging from 25 – 100 Mbps.

For reference, 25 Mbps is the minimum standard for broadband set forth by the FCC. It allows for two-to-four users to stream HD content on multiple devices, play online games, and more.

Plans offering 100 Mbps or more allow for 4K streaming, and are essential for robust networking applications like smart home technology.

Plans that offer less than 25 Mbps download speed do not meet the FCC’s minimum broadband requirement. Those subscribing to these speeds are more limited in the activities they can participate in and are considered underserved if this is the only option available to them. Twenty-two percent of recent internet plan purchases fit into this category.

Internet Plan Speed % of Total Orders
<25 Mbps 22.17%
25-100 Mbps 40.58%
100-300 Mbps 28.16%
300-1000 Mbps 9.09%

TV

Overall, 32 percent of those who currently have either cable or satellite TV service switched providers within the past year. This amounts to $24.74 billion in new TV services purchased. If accounting for streaming services, this number increases to $66 billion.

Additionally, 71 percent of those who currently have streaming service(s) subscribed to at least one additional service in the past year. The minority (29 percent) of those who stream for entertainment did not add an additional service in 2019.

We asked respondents to indicate the primary reasons why they switched their TV service, if they did so. The leading reason selected for switching was price, followed by those who were moving and searching for a better quality service.

Reasons for Purchasing new Cable or Satellite Service
I wanted a better price 48.25%
I was moving 34.21%
I wanted a better quality service 33.33%
I wanted to watch specific shows or events 17.54%
I wanted better customer support 11.40%
Other Reasons 4.39%

In the same vein, we asked streamers why they were motivated to subscribe to a new service. Watching specific shows and finding a better price were both selected by over half of respondents. As the trend of content being exclusive to a specific streaming platform continues to grow, we expect this behavior to do the same over the next year and beyond.

While cord cutting was the least popular of the reasons selected for subscribing to a new streaming subscription, many of the other reasons written in by respondents hinted at the general theme of leaving traditional TV in favor of streaming.

Reasons for Purchasing new Streaming Service
Affordable pricing 54.02%
I wanted to watch specific shows or events 52.01%
I wanted to watch without advertisements 30.46%
I was offered a special promotion to join 29.89%
I wanted a better quality service 21.26%
I wanted to cut the cord 15.52%
Other Reasons 4.02%

Verizon Fios held the highest satisfaction amongst consumers overall, but Xfinity had the most satisfied new customers. On the other hand, Cox had the least satisfied new customers, and AT&T Uverse subscribers reported the worst satisfaction overall.

Recent satellite subscribers averaged lower satisfaction than those that had their service prior to 2019.

Curiously, new Frontier Fios customers indicated being far less satisfied with their service than those that have been subscribed for over a year.

Satisfaction of Cable & Satellite TV Customers by Major Provider (out of 100 Points)
Service Provider Had Service prior to 2019 Purchased Service in 2019
Verizon Fios 71 72
Dish 70 70
DirecTV 72 62
Xfinity Cable 64 72
Frontier Fios 88 57
Charter Spectrum Cable 60 68
Cox Cable 63 56
AT&T Uverse 59 57
All Other Service Providers 70 69

Those tdat added at least one new streaming service in 2019 and had Hulu as one of the services in their portfolio saw the biggest increase in satisfaction compared to those who didn’t add any new services in 2019.

Overall, most new subscribers in 2019 reported being more satisfied with their services overall than those who subscribed in years prior.

Satisfaction of Streaming TV Customers by Major Services (out of 100 points)
Service Provider Streaming prior to 2019 Added new Service in 2019
Netflix 66 68
Hulu 61 65
Amazon Prime Video 65 64
Disney + 64 67
YouTube Premium / TV 70 73
All Other Streaming Services 67 66

The majority of consumers who purchased a traditional TV service from a major cable or satellite provider selected a plan that included between 151 and 250 channels. Less than three percent of new customers selected a plan with less than 150 channels.

Number of Channels included in TV Plan % Total Orders
<=150 Channels 2.55%
151-250 Channels 50.76%
250 -<400 Channels 35.45%
400+ Channels 11.24%

Phone

Ninety-eight percent of household decision makers reported that they currently subscribe to a phone plan. Seventy-one percent only have a mobile service, while 24 percent have a mobile plan and a landline. A small minority of three percent only have landline. Less than two percent reported no phone service. Fifty-six percent of respondents took the survey on iPhone or iPad, while 38 percent took it on Android device.

Seeking a better price was the overwhelming response consumers gave when asked why they switched phone services. Beyond price, a quarter of shoppers were seeking better call reception or quality.

Reasons for Purchasing new Phone Service
I wanted a better price 61.74%
I wanted better reception or call quality 25.22%
I was moving 19.13%
I wanted better customer support 17.39%
I did not previously have service 9.57%
Other Reasons 6.96%

Overall, new phone customers are far less satisfied than customers who had services prior to 2019, regardless of service type.

Satisfaction of Phone Customers by Service Type (out of 100 points)
Service Type Service prior to 2019 Added new Service in 2019
Mobile 80 74
Landline 71 61

About Our Data

Data for the BroadbandNow 2020 U.S. Internet, TV & Phone Shopping Study comes from three sources. First, we used anonymized shopping data from millions of consumers on BroadbandNow.com, as well as additional owned and operated web assets that serve as online resources and consumer guides that millions of Americans use to shop for home services.

Second, we asked 559 self-identified household decision makers across the U.S. about their sentiments on their portfolio of home services. This included asking if they had signed up for internet, TV (traditional or streaming), or phone service (landline or wireless) in 2019. Those who answered affirmatively were asked a series of questions to understand why they had purchased, and to learn more about their experience. Third, we used anonymized provider sales data from 2019.

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