Sixty Percent of Wired Homes Now Use Broadband

First Quarter Saw Addition of 3 Million Cable and DSL Subscribers

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NEW YORK (AdAge.com) -- Nearly 70% of all U.S. households now pay for an online connection, and 60% of those homes connect via broadband, according to new research from Leichtman Research Group. Leichtman also points to a market with plenty of room for growth, which should be welcome news for marketers betting on better web service to keep the online-ad market booming.
Cable remains the most common source for residential broadband, driven by its strength among higher-income households.
Cable remains the most common source for residential broadband, driven by its strength among higher-income households. Credit: AP

Millions per quarter
Cable and DSL providers added over 3 million subscribers in the first quarter of this year. Indicating a growing interest in broadband, 40% of current narrowband/dial-up subscribers said they are interested in getting broadband.

Cable remains the most common source for residential broadband, driven by its strength among higher-income households. Thirty-seven percent of all households with annual incomes of more than $75,000 subscribe to cable broadband, while 27% subscribe to DSL.

Broadband affluent
Among households earning between $30,000 and $75,000 per year, 21% subscribe to DSL and 18% to cable. The mean annual household income of cable-broadband subscribers is 12% higher than their DSL counterparts, according to the study. The mean income of broadband subscribers is 35% greater than narrowband/dial-up subscribers.

"By the end of the year 2010, there will be over 105 million residential subscribers in the U.S., with over 80% subscribing to broadband," Bruce Leichtman, president and principal analyst at Leichtman Research Group, said in the report.

In June, Nielsen//NetRatings reported that nearly three-quarters of active web users in the U.S. connected at home via broadband in May. That represented a growth of 15% over a year ago, when just 57% of active web users relied on broadband connections at home. Further, Nielsen found that broadband users are more likely to make better use of internet functionalities and newer technologies, such as RSS feeds and blogging.

Hasn't reached saturation
"Although we are not seeing the explosive month-over-month growth we once were, the market for broadband internet connection has not yet reached saturation," said Jon Gibs, senior director of media at Nielsen//NetRatings. "We're past the point where decreasing prices and increasing availability will move the needle for providers; the remaining consumers will be pushed to broadband as the internet continues to move beyond text-based information to a comprehensive source for video," he continued.

The total number of home-broadband users has grown 30% year over year, found Nielsen, from 78.6 million in May 2005 to 102.5 million in May 2006, while the number of narrowband users has dropped 31% in the same time period, from 58.8 million to 40.3 million.

Broadband composition remains high in the workplace, with 90% saturation in May 2006; a year ago that figure was 82%, according to Nielsen's findings.
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