Light Reading

Many Pay-TV Subs Still Unhappy Campers

Alan Breznick
3/11/2014
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Despite recent efforts to boost their video and broadband offerings, North American pay-TV providers are far from out of the woods just yet.

In its latest study of the US-Canadian video market (registration required), Digitalsmiths Corp. found that up to 43% of pay TV subscribers are planning to cut or change their cable or satellite TV service over the next six months or are considering such a move. Further, about 20% of cable and satellite TV subscribers said they are unhappy with their current provider.

Digitalsmiths surveyed 3,140 pay-TV customers in the two countries and found that the biggest source of unhappiness remains high monthly subscription bills for multichannel video service. About two-thirds of unsatisfied customers (67%) cited increasing fees for video service, while 37% named increasing fees for Internet service, 34% cited bad channel selection, and 31% cited poor customer service.

In another notable sign of subscriber discontent, nearly three-quarters of pay-TV subscribers (73%) said they don't order pay-per-view or video-on-demand movies from their current provider. Yet 45% are buying similar fare from such increasingly popular over-the-top services as Netflix Inc. (Nasdaq: NFLX) and Hulu LLC .

In one more disturbing sign for US and Canadian pay-TV providers, 36% of subscribers said they know their operator offers TV Everywhere services. Fifty-two percent said they don't know about such offerings, and 11% said the offerings don't exist, even if they do.

On the positive side for pay TV providers, only 11% of current cable and satellite subscribers said they plan to change or cut their service in the next six months. The bulk of potential ex-customers (32% of those surveyed) said they might consider such a change; this indicates they could still be won over if wooed effectively.

Moreover, the survey indicated that one way pay-TV providers could boost customer satisfaction is by offering recommendations for viewing video content. A good portion of viewers feel overwhelmed by the viewing choices available to them; 53% of the respondents said they would like such program recommendations built into their on-screen programming guides. (Not too coincidentally, Digitalsmiths specializes in building such video recommendation engines for service providers.)

Digitsalsmiths conducts these extensive subscriber surveys every quarter. TiVo Inc. (Nasdaq: TIVO) recently acquired the company for $135 million. (See TiVo to Acquire Digitalsmiths and TiVo Racks Up More Big Gains.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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PaulS681
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PaulS681,
User Rank: Light Beer
3/12/2014 | 7:15:28 PM
Ironic
Isn't it Ironic that the internet bandwidth these cable TV giants are providing is helping kill thier TV product.
PaulS681
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PaulS681,
User Rank: Light Beer
3/12/2014 | 7:12:41 PM
sign of the times
This is a direct result of the evolving of the internet as it pertains to streaming media. With Netflix and hulu and all the other similar services you dont need to pay $80 a month for TV anymore.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/11/2014 | 8:50:56 PM
Re: Discontent May Not Mean Leaving Ship
If Aero survives its Supreme Court challenge, that will be severely disruptive or the cable industry. Assuming Congress doesn't just pass a law banning Aero.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
3/11/2014 | 7:01:00 PM
Re: Discontent May Not Mean Leaving Ship
A big part of the issue is the cost of content - granted, cable giants such as Comcast own content  -- as every content owner looks at the payTV providers like cash cows. 

So I think the coming plague on the video services industry is going to impact a broader swath of the ecosystem.  

Smaller telcos are viewing video as a necessary evil and see broadband as their real service. 
KBode
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KBode,
User Rank: Light Sabre
3/11/2014 | 6:39:13 PM
Re: Discontent May Not Mean Leaving Ship
I have the nagging sense that the sniffles will turn somewhat bubonic if we can't do something about these bi-annual rate hikes and inflexible channel bundles within the next three to five years.

There is (there has to be) a breaking point in terms of cable TV pricing. I'm very curious about precisely where it as, as clearly is the cable industry, based on their endless refusal to compete on price in order to test consumer apathy.
Ariella
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Ariella,
User Rank: Light Sabre
3/11/2014 | 6:30:51 PM
Re: Discontent May Not Mean Leaving Ship
@Carol excellent analogy. I don't have cable but am familiar with people's complaints about their service providers. 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
3/11/2014 | 3:27:58 PM
Re: Discontent May Not Mean Leaving Ship
Disliking your cable company is like having the sniffles. They are annoying but you often go long periods of time without doing anything to find a remedy. 

I find I dislike my pay TV provider more in the five days after I've paid my bill. But thus far, despite experimenting with a variety of alternatives, I haven't found any other service that meets my specific viewing needs (middle-of-the-road episodic TV, major DVR dependence, general sports stuff and tons of hockey) like a traditional pay TV package. 

Just speaking anecdotally, however (always dangerous), there are more and more folks that I know who are gleefully cutting the cord and skipping away. And that's the residual effect of having had the cable sniffles for too long. 
KBode
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KBode,
User Rank: Light Sabre
3/11/2014 | 3:20:50 PM
Re: Discontent May Not Mean Leaving Ship
I think a lot of people see cancelling multiple services as a significant hassle, and after a while don't think that most companies are all that different. Still, you'd kind of wish that these people that are historically upset with their cable providers would actively do something about it and cancel, switch, or examine cutting the cord. The cable industry doesn't appear to learn as long as all of the people contributing to their historically-dismal customer satisfaction rankings don't back up that discontent with action.
SarahReedy
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SarahReedy,
User Rank: Blogger
3/11/2014 | 2:58:24 PM
Re: Discontent May Not Mean Leaving Ship
AT&T occassionally sends me Visa gift cards as rewards that are for $10, but really $5 when I go to spend it. Even got a $20 one, but really $15 when I tried to spend it, once. It's a nice gesture, but I'd rather have significant discounts on my bill, something I don't see happening anytime soon.
SarahReedy
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SarahReedy,
User Rank: Blogger
3/11/2014 | 2:56:22 PM
Re: Discontent May Not Mean Leaving Ship
Agreed. I am amongst those who would've said, yes, I am planning to leave in 6 months, and I still haven't gone anywhere. I do watch Netflix more than anything now though.
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