Pay-TV Satisfaction Worsens, but Industry Adds Subscribers in Q1

May 20, 2014

This article is included in these additional categories:

Customer Satisfaction | Media & Entertainment | Mobile Phone | Pay-TV & Cord-Cutting | Television | Top Brands

ACSI-Customer-Sat-Pay-TV-Providers-May2014Customer satisfaction with subscription TV providers is traditionally low – and this year is no different. In fact, satisfaction with providers has dropped to a multi-year low, per a new report [download page] from the American Customer Satisfaction Index (ACSI), which finds that the index for subscription TV services fell 3 points to 65 on its 100-point scale. That’s the lowest point since 2009, and the second-lowest satisfaction rate of the 43 industries measured by the ACSI.

Of note, though, the top multi-channel video providers in the US (representing about 94% of the market) actually added roughly 260,000 net video subscribers in Q1 2014, according to new figures from the Leichtman Research Group (LRG). (It’s worth noting that the ACSI index is based on a survey fielded during Q1.)

The industry’s 260,000 net adds are up from a gain of 230,000 during the same period last year, and represent the best quarterly result for providers since Q1 2012. Moreover, it comes immediately after the first calendar year of net subscriber losses.

While the results imply that dissatisfied customers aren’t abandoning their providers, that may not be entirely the case. The ACSI finds that customer satisfaction with fiber/satellite providers is 8 points higher on average than with cable companies (68 and 60, respectively), while LRG details a shift in the industry whereby satellite companies are adding subscribers while cable providers are shedding them. Indeed, the top cable companies shed roughly 51,000 subscribers in Q2, while the top satellite and telephone companies (such as to-be-acquired DirecTV and AT&T U-Verse) added more than 300,000.

Those providers happen to enjoy the best customers satisfaction rates, per the ACSI, although they fell from last year. In this year’s results, DirecTV dropped 3 points to an index of 69, while AT&T U-Verse fell 2 points to the same score. Even so, the ACSI notes that the worst-performing fiber/satellite provider, DISH Network, still performed far better than the best-performing cable company, Cox Communications (67 and 63, respectively). The worst-performer? Time Warner Cable, by a long shot, plummeting 4 points from its industry-worst score last year to a low of just 56 this year.

Pay-TV subscribers appear to be least satisfied with their providers’ call centers (66) and websites (71), while being most satisfied with the HD and picture quality (each at 83). Absent from the survey was satisfaction with cost, which is a major driver of cord-cutting. Indeed, a new FCC report [pdf] finds that the average monthly price of expanded basic cable service rose by 5.1% during the year ending in January 1, 2013, far higher than the 1.6% rise in the consumer price index.

Other Findings:

  • Customer satisfaction with internet service providers dropped 2 points to a score of 63, the lowest of any industry measured by the ACSI. Time Warner Cable was again the worst-performer, with a score of just 54.
  • Samsung (+ 5 points to 81) overtook Apple (-2 points to 79) to lead all cellphone manufacturers in satisfaction ratings this year. The industry as a whole rose 2 points to a score of 78. Samsung’s Galaxy Note II was the top-rated smartphone model (85), followed by the iPhone 5C (84) and iPhone 5S (83). Customers were least satisfied with the performance of phones in terms of battery life.
  • Satisfaction with wireless telephone service providers was flat at 72, led by the aggregate of smaller providers such as TracFone and Cricket (78).

About the Data: The 2014 ACSI report on cellular telephones, computer software, fixed-line telephone service, Internet service providers, subscription TV service, and wireless telephone service is based on interviews with 12,248 customers of these six industries, chosen at random and contacted via telephone and email between January 13 and March 11, 2014. Customers are asked to evaluate their recent purchase and consumption experiences with the products or services of the largest companies by market share within each of the measured industries, plus an aggregate of all other smaller brands not measured individually by name in the ACSI.


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