Pay-TV failing dismally on customer satisfaction | Major Businesses | Business
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For Americans, overall satisfaction with alternative video services such as streaming and transactional-based over-the-top (OTT) offerings is considerably higher than it is with traditional pay-TV, spurring an increase in cord-cutting from 2015.

jd power rankingsThis is according to JD Power’s annual wireline study series, now in its 15th year. The TV-specific study finds that, compared with pay-TV service providers, satisfaction is significantly higher with paid streaming video services like Netflix, Amazon and Hulu; skinny bundle offerings like SlingTV and PlayStation Vue; and programming apps like HBO Go.

Out of the traditional providers, AT&T U-verse/DIRECTV ranks highest in TV customer satisfaction in the East (782) and South (764) regions of the States; Verizon FiOS (776) ranks highest in the West region; and DISH Network (747) ranks highest in the North Central region.

Among customers who switched providers in the previous 12 months, the most commonly cited reasons for switching are ‘cost was too high’ (25%); ‘moved locations/previous provider not available at new location’ (24%); ‘competitor offered a better deal’ (17%); and ‘customer service was poor’ (10%).

For example, customers rate their primary alternative video service higher than their TV service for the overall experience (7.92 vs. 7.18, respectively, on a ten-point scale), which is largely driven by much higher ratings for the overall cost of service experience (7.99 vs. 6.42). Customers also rate their primary alternative video service higher than their TV service for the overall performance and reliability (7.98 vs. 7.82), programming (7.87 vs. 7.76) and billing (8.04 vs. 7.54) experiences.

Subsequently, with relatively low prices and increasing rates of adoption, alternative video services are helping drive the cord-cutting trend. Nearly two-thirds (63%) of customers have used an alternative video service in the previous year, up from 58% in 2015. Additionally, 73% of customers who plan to cut the cord on TV service in the next year indicate they will use an alternative video service.

“This finding partly reflects age demographics since younger customers are more likely to use alternative video services than older customers, and younger customers are more satisfied with alternative TV service than older customers,” said Kirk Parsons, senior director and technology, media & telecom practice leader at JD Power. “Despite their higher satisfaction, customers who have used an alternative video service in the previous year are much more likely than those who haven’t used one — 14% vs. 4% — to cut the cord on TV in the next year.”

However, customers who cut the cord on TV are not necessarily lost for TV providers, and increasing their satisfaction raises the likelihood that they will reactivate TV service or upgrade their internet service in the future. Among customers who plan to drop TV service during the next 12 months, 44% say they expect to reactivate it during certain times of year. Overall satisfaction among customers in this group is 845 on a 1,000-point scale, compared with 575 among those who do not plan to reactivate TV service and 561 among those who don’t know if they will reactivate it.
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