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  • Writer's pictureLinda Andrews - Editorial Assistant, Nuse Online

UK Consumers Are Still Spending On Digital Home Products

Less than one-in-seven digital households (12%) 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 2,500 UK consumers on their attitudes toward technology, media and telecoms experienced in the home.

Almost half of UK respondents (49%) 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.

Despite growing concerns among some households about rising broadband and streaming/pay-TV prices (cited by 67% and 56% respectively), perceived value-for-money remains consistent year-on-year and has risen substantially in relation to content from broadband providers (55%, up from 42% last year) and smart home products (39% vs. 35% last year).

This positivity is compounded by increased enthusiasm for premium broadband offerings, with 35% of UK consumers willing to pay more for good customer service and back-up connectivity (34%). Turning to streaming services, 37% of respondents would be willing to pay more to access all content via a single platform.

Praveen Shankar, EY UK & Ireland Managing Partner for Technology, Media and Telecoms (TMT), says:

“Despite persistent inflation and the cost-of-living squeeze effecting disposable incomes, our research shows that UK consumers are prioritising spending on home broadband, mobile connectivity or streaming services, although perceived value-for-money remains front of mind."

“Whilst spending on these services is currently holding firm, it’s vital that service providers take steps now to ensure they can continue to offer compelling propositions that are flexible and reflect consumer priorities. For example, there are clear opportunities for service providers to differentiate themselves in a competitive market with increasing appetite for premium broadband offerings, good customer service and network reliability.”

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 UK households say the economic climate has made them less likely to pursue new connectivity and content experiences (44%) and adopt new technologies and gadgets for the home (43%). And 62% 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-three households, and adoption levels are only increasing slightly year-on-year. Notably, trust in the brand was ranked as the No.1 factor influencing consumers when choosing a smart home device (46%), followed by an attractive one-off or monthly price (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 almost half (48%) agreeing that they are faced with too much choice across platforms. Meanwhile, 17% of streamers indicate that they have canceled at least one monthly subscription in the previous 12 months, with 14% planning to cancel one or more in the future. The competitive landscape and spending pressures both feed into these decisions, with 54% citing cost savings as a reason to cancel.

Network reliability fails to show material improvement

The study further highlights that network reliability continues to be a key pain point for consumers. One-in-four respondents (22%) say they regularly experience an unreliable home broadband connection. Perceptions around mobile data are more concerning: despite increasing 4G and 5G coverage levels, 24% indicate that they experience an unreliable mobile connection often or very often. Overall, just over a third of households (35%) 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.”


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