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Cable Technology Feature Article

October 08, 2010

Cable TV Subscribers Frustrated with Pricing, Survey Suggests

By Beecher Tuttle, TMCnet Web Editor

Consumers are becoming increasingly dissatisfied with residential pay-TV services, and it seems that price is the major issue, according to a recent J.D. Power and Associates report.

The average customer satisfaction rating for the cost of television services fell by 2.5 percent over the past year, from an already mediocre 555 on a 1,000-point scale in 2009 to 541 this year.

Customers of traditional cable providers were the most dissatisfied with the fairness of pricing. These respondents were, on average, 22 percent more frustrated with the cost of service than customers of telephone company providers and 18 percent more dissatisfied than customers of satellite providers, including DirecTV (News - Alert) and the Dish Network.

“It’s apparent that TV providers must better communicate their price-value proposition, as customers are increasingly voicing irritation with the amount of their monthly bill," said Frank Perazzini, director of telecommunications at J.D. Power and Associates.

"Seventy-four percent of customers who say they definitely or probably will change TV providers in the next year cite price as a major reason to switch,” he added.

Meanwhile, consumers seemed to be relatively content with the quality of their television service. The overall TV satisfaction rating remained at a respectable 629 out of 1,000.

The survey also suggests that more customers may continue to leave traditional cable companies for telco and satellite providers. AT&T (News - Alert) U-verse, an Internet protocol-based TV provider, received the highest ranking in the west, south and north central regions. Verizon FiOS was the top rated television provider in the East. These rankings were based on performance and reliability; customer service; cost of service; billing; and offerings and promotions.

In an effort to mitigate rising prices, a growing number of consumers are passing on premium channels and other expensive offerings. Currently, a total of 44 percent of TV customers subscribe to "basic-only" services, up from 40 percent in 2009.

“Economic issues are still major considerations for many households across the country,” said Perazzini. “Customers who are foregoing premium channels are filling the void with video on demand, pay per view, movie rentals and time-shifted DVR content.”

Beecher Tuttle is a Web Editor for TMCnet. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf