Pay-TV providers flunk consumer satisfaction test

editor's corner

If you are a parent, you know the reaction a "D" on one of your children's report cards elicits. Stern look, stern words, vows of increased supervision, workload etc. Or, perhaps, you're a softy, like me.

Generally, I follow the above with questions... Why are you struggling? What do you think you can do about it? Let's work together on resolving the issues, establish a strategy and fix that grade.

As a dad, I've only gone there a couple of times, and it's worked pretty well. Fortunately, my two sons are pretty solid students, although foreign language has consistently been a little muddy.

So how come, in the dozen years that pay-TV services have been flunking their annual exams--the American Customer Satisfaction Index (ACSI) put together by the Ross School of Business at the University of Michigan--there hasn't been any improvement?

Yesterday, the ACSI came out and gave the industry another "D," grade, a 66 out of 100 on the index.

It was the third straight year pay-TV providers scored 66, which actually is pretty good for them.

The previous years, starting in 2001, read more like golf scores you'd dream about shooting than a report card you'd like to see: 64, 61, 61, 61, 61, 63, 62, 64, 63, and the more recent "improvements" to 66.

During that time, the best scores never got above 74. That solid "C" came this year from Verizon's FiOS TV service, which, with AT&T's U-verse TV, has only been on the list for the past three years... their barely average scores have actually pulled the rest up.

The worst? You guessed it: Cable TV. Charter was the lowest at 59, not too surprising since their customer satisfaction index just a couple of years ago was a 51.

The worst customer satisfaction index out of the 47 industries tracked? Newspapers... it scored a 64.

The worst company? Delta Air Lines with a 56.

Perhaps it's a little easier to explain the decay in cable subscription numbers when you look at those figures.

Earlier this month, for example, Nielsen reported that 1.5 million subscribers had dumped their pay-TV subscriptions, a decline of about 1.5 percent.

Craig Moffett, from Bernstein Research, countered those numbers with research of his own that showed overall subscriber growth was up slightly year over year, some 0.2 percent.

But the halcyon days of growth that pushed 1.5 percent per quarter are clearly gone.

Cord-cutting naysayers blame the economy, the alignment of the stars, or other factors.

I think, that as ACSI pointed out, even though service providers are, on the whole, offering more options than ever before, the reliability and rising costs continue to irk consumers.

The lack of satisfaction Americans feel with their pay-TV services isn't new.

The options they have to replace them are, and they're increasing.

Want to make a bet on next year's ACSI? I'm all over that "D." No matter what the providers do.

And that, for the moment, seems fine with them.

They shouldn't be too surprised when consumers increasingly turn to over-the-top services, online video and video-on-demand. -Jim