According to the latest J.D. Power and Associates Residential Television Service Satisfaction
study, consumers are "notably less satisfied" with TV services than last year. That isn't surprising given the relentless and often bi-annual rate hikes imposed by satellite, telcoTV and cable TV providers, which resulted in
new and notable cord cutting last quarter. According to the study, Customer satisfaction with the cost of television service averaged 541 out of 1,000 in 2010, down 14 points from 555 in 2009.
The study measured satisfaction with TV services in four regions (
East,
West,
North Central,
South). AT&T U-Verse and Verizon FiOS ranked highest among TV providers, though the cable companies ironically rank higher on residential phone service.
Overall, customers continue to be annoyed with price hikes, which are courtesy of the endless dance of death between broadcasters (who continually hike programming costs) and TV operators (who pass these costs on to consumers along side hikes and new fees of their own). Consumer annoyance has been amplified by a sour economy, and mirroring
recent concerns from the investment sector, JD Power notes that these hikes can't continue indefinitely:
"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. 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."
Consumers (for now) continue to pay for services despite these hikes, which is obviously good news for TV providers. But despite
changing state laws to ease telcoTV entry into the sector (many times at the cost of consumer protections, local rights, and increased deployment), TV price reductions promised by lobbyists never arrived. Carriers instead engage in non-price competition, and focus on creating the illusion of value through added services that are often half-assed (see AT&T's
Hulu clone, for example).
The TV sector is
begging for disruption and the entry of inexpensive, simple, a la carte Internet video options. There's an endless flood of articles insisting that
Internet video isn't a threat, but that's largely thanks to the fact that broadcasters are constricting TV streaming licensing for fear of cannibalizing TV revenues, resulting in limited alternatives for consumers. If these
endless carriage disputes continue, cable operators may eventually balk, and broadcasters may open their eyes to alternative delivery opportunities.
