Fiber-based pay TV providers top U.S. customer satisfaction survey
As a whole, pay TV service providers don't meet customer expectations thanks to ongoing price hikes and reliability issues. And, in a twist of sorts, cable is seen as "an inferior mechanism for delivering television compared to fiber optics and satellite," according to the American Customer Satisfaction Index (ACSI) Information Sector for 2013.
Good news for pay TV service providers is that the subscription TV space as a whole ended a three-year run of bad customer satisfaction results with a 3 percent gain to climb to a grade of 68. The bad news is that this is the third worst score of 43 industries the ACSI covers. Pay TV service providers were six points lower than fixed line telephone service, which scored 4 percent higher with a 74.
The culprits driving the unsatisfactory results were easy to identify because they were the same ones that crop up every year.
"The pattern of rising costs to consumers (6 percent on average per year industry-wide) and sporadic reliability keeps the subscription TV industry at lower levels of customer satisfaction than other household services," the report stated. "Among the largest subscription TV providers, customers are far more satisfied with their fiber optic and satellite service than those receiving service from cable companies."
Verizon (NYSE: VZ) FiOS topped the list with a score of 73, 1 percent higher than 2012, with DirecTV (Nasdaq: DTV) hard on its heels at 72, up 6 percent over the previous year. AT&T (NYSE: T) U-verse at 71 (up 4 percent) came in third and Dish Network (Nasdaq: DISH) came in fourth with a 70, up 1 percent year-over-year.
No cable operator managed to top the 70 mark. Cox led the way at 65, followed by Charter Communications (Nasdaq: CHTR) at 64, Comcast (Nasdaq: CMCSA) with 63, and Time Warner Cable (NYSE: TWC) at 60. Charter also showed the biggest gain (from 59 to 64) while Comcast and Cox were both up 2 percent and TWC was off 3 percent.
The survey did not yet see a great threat from OTT but ACSI director David VanAmburg said that this is a space worth watching, especially based on the pay TV industry's penchant for annual price increases "coupled with sporadic reliability."
"While nearly 90 percent of households have some form of TV subscription, the industry is facing small but growing competition from Internet video streaming," VanAmburg said in an ACSI press release.
While negatives are pushing subscribers away from pay TV providers, there are positives that are keeping those same subs in the fold, the report noted.
"Picture quality is a bright spot," it said, pointing to industry-level benchmarks of 85 for both HD and basic picture quality.
After that, scores fell off slowly but surely with ease of using remotes, on-screen menus and program guides, TV signal reliability and ease of understanding the bill coming in at 80; premium channels available, ability to keep service interruptions and outages to a minimum and range of available channels following at 79. Things really bottomed out with industrywide website satisfaction hitting 72 and call center satisfaction ranked last at 70.
"Customers who visited their subscription TV provider's website did not like that much (72) compared with the ACSI's overall average for website user satisfaction (78)," the report said.
Overall, subscription TV service providers are just part of an overall industry trend, said Claes Fornell, ACSI founder and chairman in the organization's press release.
"Customer satisfaction with the Information sector is improving but none of these industries score higher than the national average," Fornell said. "Limited competition, combined with high consumer expectations for information services, are a formula for relatively weak buyer satisfaction."
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