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The amount of people dropping traditional pay-TV services for a web-based one is rocketing, and the third quarter of 2019 OpenVault broadband industry report has found that cord-cutting has been a key driver in a surge in average broadband data usage, presenting untapped opportunities for service providers.
Putting this trend into basic context, OpenVault said that a cord-cutting event was typically a clear signal for faster broadband speeds.
“Cord-cutters are opting for high-bandwidth over-the-top (OTT) services, and are using multiple devices in the home to consume video, often simultaneously,” the report noted.
“This behaviour lends itself to higher speed, higher margin broadband packages to ensure an acceptable broadband customer experience and the cord-cutting event is the best time for operators to educate customers and upsell them accordingly.”
Furthering the insight for such providers, the report showed clear differences in consumption patterns between subscribers on usage-based billing (UBB) plans and those on flat-rat billing (FRB) plans.
Specifically, the study found that the average consumption by cord-cutter subscribers was 520.8GB, an annual increase of 7% in the third quarter alone, and almost double the monthly weighted (UBB plus FRB) average subscriber usage of 275.1GB.
The percentage of cord-cutters that consume 1TB or more of data per month (known as power users) is 12%, almost triple the 4.2% third-quarter figure for weighted average subscribers.
The total number of power users increased 62% year over year, driven largely by FRB subscribers. While UBB subscribers chose 1GBps packages at a rate that is 89% higher than that of FRB subscribers, FRB subscribers exceeded 1TB at a 30% higher rate and 2TB at a 64% higher rate than those on UBB plans.
Yet despite those taking up streaming video fuelling the rapid increases in consumption levels, OpenVault found that only 29% of consumers upgraded their broadband packages when interacting with operators’ customer care teams to close down traditional services. Two-thirds of cord-cutters maintained the same broadband packages, while 4% actually downgraded their broadband services.
According to the report, the third quarter of 2019 overall weighted average broadband usage in the US was 275GB, a year-over-year increase of 21% over the third quarter of 2018 figure of 228GB.
During the same period, the median monthly weighted average usage increased nearly 25% from 118.2GB to 147.4GB, indicating said OpenVault that consumption is increasing across the market as a whole.
Looking regionally, the OpenVault Broadband Industry report found that at higher levels of service, usage is closely aligned between Europe and North America and is virtually identical at the 50-75MBps tier.
At lower tiers, North American subscribers consumed at greater rates, including nearly 150% more at the 30-40MBps speed tier and nearly 50% more at the 10-20MBps tier.
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