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ChangeWave Research: Home TV Service Providers and Market Trends
TV Service Provider Trends
The Battle Among Traditional Providers
Paul Carton, Andy Golub and Mike Wrobel
Overview: The war between Cable, Fiber-Optic and Satellite TV providers is being fought on both the traditional battlefield and an alternative front that includes a host of other companies like Amazon, Apple, Netflix and Google.
This ChangeWave Research report focuses on the battle among traditional TV providers, while a January 2012 ChangeWave survey report will delve into the growing threat posed by alternative TV providers. ChangeWave Research is a service of 451 Research.
A total of 2,443 U.S. and Canadian respondents were surveyed during December on a range of traditional TV service provider issues, including customer satisfaction, loyalty and future demand trends.
Customer Satisfaction
When it comes to customer satisfaction, Fiber-Optic providers continue to maintain a big lead over the competition – with 41% of their TV customers saying they’re Very Satisfied.
This compares to 29% for Satellite companies and just 15% for Cable companies.
At the provider level, Verizon FiOS (48% Very Satisfied; up 8-pts) continues to set the industry standard, followed by DIRECTV (34%; up 2-pts) and AT&T U-verse (33%; up 8-pts).
We note that Bright House (24%; down 3-pts) – while in fourth place – has been on a steady decline over the past two years of ChangeWave surveys:
We also looked specifically at satisfaction levels regarding the customer service offered by providers – including sales, service and tech support. Within this area Bright House does outperform the rest of the industry. Nearly four-in-ten Bright House subscribers (37%) say they are Very Satisfied with their customer service, followed by DIRECTV (35%), Verizon FiOS (34%), and AT&T U-verse (28%).
Customer Loyalty towards Traditional Providers
Customer loyalty is another key measure for the traditional TV industry. We asked respondents if they plan on switching television providers in the next six months, and found 10% say they plan on making a change – 1-pt higher than in our September survey.
As we’ve consistently seen in ChangeWave surveys, the Fiber-Optic providers exhibit the industry’s lowest churn rate – with just 7% of their customers saying they’ll switch. This compares to 10% for Satellite and 11% for Cable.
Verizon FiOS is holding onto its lead among providers, with just 6% of their customers saying they plan on switching in the next six months. Cox (8%) and Charter (9%) are the next two closest competitors.
Price Remains the Key Reason for Switching. Price (62%) continues to be the top reason given by respondents who plan on switching providers in the next six months.
Importantly, nearly four-in-five (79%) respondents planning to switch say their provider could still keep them as a customer if their subscription price was lowered.
Another 18% say A-La-Carte Programming Options could also help prevent them from switching, while 13% cite Benefits/ Rewards for Long-Term Customers – a variable that has been steadily rising for the past year.
Top Problems as Reported By Customers. Two problems stand out as being the biggest ones respondents are experiencing with their service providers:
· Too Many Unwanted Channels (24%)
· Outages/Service Issues (10%)
As can be seen in the charts below, significant differences exist among providers with regards to these two problems:
Too Many Unwanted Channels Outages/Service Issues
In terms of Having Too Many Unwanted Channels, Verizon FiOS (20%) and Cablevision (21%) rank best while Bright House (33%) and DISH Network (33%) rank worst.
Regarding Outages and Service Issues, Verizon FiOS leads the industry with only 2% of their customers reporting it as a problem, while AT&T U-verse ranks worst (16%).
Future Demand Trends among Traditional Providers
Looking at the next six months, more respondents say they plan to switch to Verizon FiOS (17%; down 2-pts) than any other provider, followed closely by AT&T U-verse (15%; up 2-pts) and DIRECTV (15%; down 2-pts).
We note that DIRECTV has fallen to its lowest level of the past year, while DISH Network (12%) has increased 2-pts since September.
Among Cable providers, Comcast (8%) has hit a new high in a ChangeWave survey in terms of likelihood of gaining switchers.
But the rest of the cable providers continue to lag in terms of likelihood of gaining switchers.
Top Considerations When Switching. When it comes to making a decision on which TV service provider to choose, planned switchers say Personal Knowledge/Opinion (47%) is most important, followed by Feedback from Friends (26%).
And which of the following considerations is most important to you when deciding which TV programming service provider to switch to?
Current Survey Dec ‘11Personal Knowledge/Opinion / 47%
Feedback From Friends and Family / 26%
Reviews by a Respected 3rd party (e.g., Consumer Reports, J.D. Power, PC Mag.com) / 15%
Other / NA / 12%
Bottom Line: The current results show Verizon FiOS leading the competition in most key industry indicators – including customer satisfaction, loyalty and future demand.
Among satellite providers, DIRECTV is facing increased competition from top rival DISH Network in terms of customer demand preference going forward.
And in the cable space, Comcast is showing some renewed momentum in future demand among switchers, having hit a new high and leading the other cable providers. Nonetheless, it trails Fiber-Optic and Satellite providers by a considerable margin.
In January 2012 ChangeWave will be conducting an Alternative TV Trends survey to take a close up look at the growing threat posed by alternative TV providers to the traditional TV subscription model. Key topics will include the trend towards cord-cutting, free and paid alternative TV providers, and Internet-connected devices – along with a close-up look at the competition between Apple TV, Google TV, Amazon, Hulu and Netflix, among others.
Summary of Key Findings
The ChangeWave Research Network is a group of 25,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.
Table of Contents
Summary of Key Findings 6
The Findings 8
Consumer Use of TV Apps 8
Customer Satisfaction: Traditional Home TV Providers 10
Customer Loyalty 12
Future Demand Trends 17
Other Industry Trends 19
ChangeWave Research Methodology 20
About ChangeWave Research 20
About 451 Research 20
The Findings
Introduction: The war between Cable, Fiber-Optic and Satellite TV providers is being fought on both the traditional battlefield and an alternative front that includes a host of other companies like Amazon, Apple, Netflix and Google.
This ChangeWave Research report focuses on the battle among traditional TV providers, while a January 2012 ChangeWave survey report will delve into the growing threat posed by alternative TV providers. ChangeWave Research is a service of 451 Research.
A total of 2,443 U.S. and Canadian respondents were surveyed during December on a range of traditional TV service provider issues, including customer satisfaction, loyalty and future demand trends.
Customer Satisfaction
When it comes to customer satisfaction, Fiber-Optic providers continue to maintain a big lead over the competition – with 41% of their TV customers saying they’re Very Satisfied.
This compares to 29% for Satellite companies and just 15% for Cable companies.
Here’s a closer look at satisfaction ratings by type of provider:
How satisfied are you with your current TV programming service provider?
Satisfaction Rating by Type of Provider:
Fiber-Optic ServiceCurrent Survey Dec ‘11 / Previous Survey Sep ‘11 / Previous
Survey
Jun ‘11 / Previous
Survey
Mar ‘11 / Previous
Survey
Dec ‘10
Very Satisfied / 41% / 33% / 38% / 36% / 43%
Somewhat Satisfied / 48% / 52% / 50% / 51% / 47%
Somewhat Unsatisfied / 9% / 12% / 8% / 10% / 8%
Very Unsatisfied / 2% / 3% / 3% / 1% / 1%
Don't Know/No Answer / 1% / 0% / 2% / 1% / 2%
Satellite Service
Current Survey Dec ‘11 / Previous Survey Sep ‘11 / Previous
Survey
Jun ‘11 / Previous
Survey
Mar ‘11 / Previous
Survey
Dec ‘10
Very Satisfied / 29% / 27% / 29% / 26% / 28%
Somewhat Satisfied / 54% / 51% / 51% / 54% / 56%
Somewhat Unsatisfied / 12% / 16% / 16% / 15% / 13%
Very Unsatisfied / 4% / 5% / 3% / 4% / 2%
Don't Know/No Answer / 1% / 1% / 1% / 1% / 1%
Cable Service
Current Survey Dec ‘11 / Previous Survey Sep ‘11 / Previous
Survey
Jun ‘11 / Previous
Survey
Mar ‘11 / Previous
Survey
Dec ‘10
Very Satisfied / 15% / 12% / 16% / 14% / 14%
Somewhat Satisfied / 57% / 58% / 56% / 55% / 57%
Somewhat Unsatisfied / 21% / 22% / 21% / 23% / 21%
Very Unsatisfied / 5% / 6% / 6% / 7% / 7%
Don't Know/No Answer / 2% / 2% / 1% / 1% / 1%
At the provider level, Verizon FiOS (48% Very Satisfied; up 8-pts) continues to set the industry standard, followed by DIRECTV (34%; up 2-pts) and AT&T U-verse (33%; up 8-pts).
Customer Satisfaction Rating by Individual Provider – Very Satisfied Rating
We note that Bright House (24%; down 3-pts) – while in fourth place – has been on a steady decline over the past two years of ChangeWave surveys:
Satisfaction Rating by Individual Provider – Very Satisfied Rating
Current Survey Dec ‘11 / Previous Survey Sep ‘11 / PreviousSurvey
Jun ‘11 / Previous
Survey
Mar ‘11 / Previous
Survey
Dec ‘10
Verizon FiOS / 48% / 40% / 45% / 41% / 48%
DIRECTV / 34% / 32% / 34% / 29% / 37%
AT&T U-Verse / 33% / 25% / 31% / 28% / 36%
Bright House / 24% / 27% / 28% / 30% / 30%
DISH Network / 23% / 23% / 23% / 24% / 16%
Comcast / 16% / 12% / 15% / 12% / 14%
Cox / 14% / 18% / 17% / 20% / 16%
Time Warner / 11% / 10% / 12% / 12% / 13%
Cablevision / 10% / 9% / 13% / 6% / 6%
Charter / 10% / 3% / 9% / 7% / 7%
We also looked specifically at satisfaction levels regarding the customer service offered by providers – including sales, service and tech support. Within this area Bright House does outperform the rest of the industry. Nearly four-in-ten Bright House subscribers (37%) say they are Very Satisfied with their customer service, followed by DIRECTV (35%), Verizon FiOS (34%), and AT&T U-verse (28%).
Focusing specifically on customer service, how satisfied are you with the customer service of your current TV service provider (including sales, service and tech support)?
Total / BrightHouse / DIRECTV / Verizon FiOS / AT&T
U-Verse / Cox / Cable-
vision / DISH Network / Time Warner / Com-
cast / Charter
Very
Satisfied / 26% / 37% / 35% / 34% / 28% / 26% / 24% / 24% / 23% / 21% / 16%
Somewhat
Satisfied / 50% / 53% / 45% / 53% / 50% / 59% / 61% / 53% / 52% / 53% / 51%
Somewhat
Unsatisfied / 14% / 4% / 11% / 7% / 10% / 8% / 7% / 17% / 16% / 17% / 20%
Very
Unsatisfied / 4% / 2% / 4% / 4% / 4% / 3% / 6% / 3% / 4% / 5% / 6%
Don't Know/
No Answer / 6% / 4% / 4% / 3% / 7% / 3% / 3% / 3% / 4% / 3% / 7%
Customer Loyalty towards Traditional Providers
Customer loyalty is another key measure for the traditional TV industry. We asked respondents if they plan on switching television providers in the next six months, and found 10% say they plan on making a change – 1-pt higher than in our September survey.
Do you plan on switching cable, satellite or fiber-optic TV service providers in the next six months?
Current Survey Dec ‘11 / Previous Survey Sep ‘11 / PreviousSurvey
Jun ‘11 / Previous
Survey
Mar ‘11 / Previous
Survey
Dec ‘10 / Previous
Survey
Sep ‘10 / Previous
Survey
Jun ‘10
Yes / 10% / 9% / 10% / 10% / 8% / 10% / 9%
No / 71% / 72% / 74% / 72% / 73% / 72% / 72%
Don’t Know / 19% / 18% / 16% / 18% / 19% / 18% / 20%
As we’ve consistently seen in ChangeWave surveys, the Fiber-Optic providers exhibit the industry’s lowest churn rate – with just 7% of their customers saying they’ll switch. This compares to 10% for Satellite and 11% for Cable.
Verizon FiOS is holding onto its lead among providers, with just 6% of their customers saying they plan on switching in the next six months. Cox (8%) and Charter (9%) are the next two closest competitors.