ACSI: Pay TV Satisfaction Fading

May 23, 2017
According to the American Customer Satisfaction Index, customer satisfaction with subscription TV is down 1.5% to 64, tied with Internet ...

According to the American Customer Satisfaction Index, customer satisfaction with subscription TV is down 1.5% to 64, tied with Internet service providers (ISPs) for last place among 43 industries tracked by the ACSI. New ACSI results indicate that wireless service is the only telecom industry to improve. ISPs, fixed-line telephone is unchanged, while pay TV is the only industry to deteriorate.

The ACSI report is based on 36,194 customer surveys collected between May 17, 2016, and April 25, 2017.

"The threat of competition does not appear to be encouraging improvement fast enough for pay TV," said Claes Fornell, ACSI chairman and founder. "Customer service remains abysmal, and viewers are continuing to switch over to streaming services with much higher customer satisfaction. More than half a million subscribers defected from cable and satellite providers during the first quarter - the largest loss in history."

Subscription TV service

Customers still prefer fiber-based video and satellite to cable, putting Fios (Verizon Communications) in first place (up 1% to 71). AT&T took the next two spots with U-verse (+1% to 70) and DirecTV (unchanged at 68). DISH Network was the lowest-scoring satellite provider at 67, while Optimum (formerly Cablevision Systems and now part of Altice USA) was the highest-scoring cable provider at 66. Suddenlink, which is also part of Altice USA, advanced 2% to 63.

Spectrum (Charter Communications) was the most improved (up 5% to 63) due in part to its merger with high-scoring Bright House Networks. Cox Communications advanced (+3% to 61), just ahead of Time Warner Cable (TWC) - now part of Charter Communications - up 2% to 60. This was the last year of ACSI measurement for TWC before they rebrand as Charter Spectrum in 2018. Frontier Communications - having acquired fiber-optic service in California, Texas and Florida - debuted in the ACSI at 60, tied with TWC. Meanwhile, Xfinity (Comcast) fell 6% to a score of 58. Despite a 4% improvement to 56, Mediacom remains the lowest-scoring pay TV provider.

Wireless telephone service

Customer satisfaction with wireless service climbed 2.8% to 73 as price wars between carriers escalated. Compared with other telecom categories where customer choice is limited, the wireless industry is a good example of how competition benefits consumers. Prices are competitive, service is better and customer satisfaction higher.

Smaller wireless carriers led (up 3% to 79). Prepaid provider TracFone Wireless gained 3% to 77. Verizon Wireless rose 4% to match U.S. Cellular (+3%) at 74. In a second year of improvement, Sprint reached an all-time high (+4% to 73). T-Mobile tied with Sprint, but moved in the opposite direction (-1%) to match the industry average (73). AT&T Mobility was at the bottom of the category (+1% to 72).

Internet service providers

ISPs remained unchanged at the bottom of the ACSI industry rankings at a score of 64. Low user satisfaction is the result of slow and unreliable service, compounded by limited competition.

Verizon's fiber-optic service Fios stayed at the top of the category (-3% to 71), but AT&T's U-verse fiber-optic service narrowed the gap considerably (+8% to 69). In third place, Optimum slipped 1% to 68. Suddenlink climbed 8% to 66, having significantly improved speed from a year ago. Spectrum also increased satisfaction (+3% to 65).

The rest of the ISPs fell below the industry average. The combined score for smaller providers deteriorated 2% to 63, and Charter's Time Warner Cable fell 6% to tie Cox Communications at 62. Comcast's Xfinity improved 2% to 60, a four-year high for the company. Mediacom gained 2% to 58. Moving in the opposite direction, CenturyLink declined 6% to 59, while Windstream slid 3% to 57. Frontier Communications was flat at the low score of 56.

Fixed-line telephone service

Customer satisfaction with fixed-line telephone service was flat at 70 as nearly half of all U.S. households do without landlines in favor of wireless phones. Individual company performance, however, is mixed. According to users, VoIP calling is the preferred mode of landline-based communication. Vonage, a VoIP provider, was up 3% to 80, an 18-year high for the entire industry. In distant second place, the group of smaller fixed-line service providers recovered (+4% to 75), and Verizon edged up 1% to 73. Spectrum leapt 9% to 71 following its merger with historically high-scoring Bright House Networks. Two companies joined Spectrum at 71: AT&T and Optimum.

Below the industry average, Cox Communications was unchanged (68), while Time Warner Cable moved up (+5% to 67). CenturyLink declined (-3% to 66), followed by Xfinity (+2%) and Windstream at 65. Frontier Communications deteriorated the most (-9% to 61).