Cutbacks in home communications and entertainment services have yet to emerge as a measurable trend, despite the ongoing recession, say analysts at Pike & Fischer, who just completed a nationwide survey on that subject.
Most consumers are spending the same amount on phone, Internet and multichannel video as they've spent in the past, the survey found.
Respondents say they would rather keep Internet, video and voice services in their budgets than any other type of expense, including gym memberships, personal care products and apparel.
But the results also point to customers becoming more aware of ways to spend less on those services. One example is people switching to prepaid wireless and dropping their postpaid accounts. In other cases people simply are buying fewer pay-per-view events or ordering fewer on-demand movies.
All of those trends are consistent with consumer behavior in past recessions, and first quarter financial results from a growing number of service providers also suggest the Pike & Fischer survey study of reported attitudes and behaviors is reflected in actual behavior.
Despite fears that "this recession will be different," so far it hasn't been. Knowing nothing other than how consumers have behaved in past recessions, one would have predicted precisely what we are seeing.
The big question marks, though, have been around newer services such as broadband Internet access and wireless, neither of which had become such mass market services during the last recession. But behavior in those two segments seems to mirror video entertainment behavior we have seen over the years.
People are careful about upgrades and premium services. They might be more prone to switch providers to get better prices. But they are not droppoing subscriptions. The single exception is that some pressure continues for wired voice, which is a product category in secular decline.
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