DIRECTV and WOW! Lead in Cable/Satellite Customer Satisfaction

August 29, 2007

This article is included in these additional categories:

Broadcast & Cable | Media & Entertainment | Retail & E-Commerce | Telecom | Television

DIRECTV ranks highest in customer satisfaction in three US regions, and WOW! ranks highest in one, among cable and satellite providers, according to the J.D. Power and Associates 2007 Residential Cable/Satellite Satisfaction Study, released earlier this month.

The study measures customer satisfaction with cable and satellite TV providers in four regional segments: North Central, East, West and South. Customer satisfaction with cable/satellite provider performance is reported as an index score based on a 1,000-point scale.

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DIRECTV – represented in all four regional segments – ranks highest in the East (with an index score of 690), West (675), and South (682) regions. Although the provider ranked highest in the 2003 and 2004 studies, 2007 marks the first year that DIRECTV leads in the West and South regions, and the second consecutive year it ranks highest in the East since the study was changed to a regional one. In addition, DIRECTV made considerable improvement in the performance and reliability factor in 2007.

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The study measures six factors to determine overall customer satisfaction: performance and reliability; customer service; cost of service; image; billing; and offerings and promotions.

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In the North Central region, WOW! ranks highest for a second consecutive year with an index score of 729 points, the highest satisfaction score in the study and 21 points higher than the provider’s 2006 score. WOW! performs particularly well in the North Central region in all six factors driving overall satisfaction.

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The study finds that as service options become more complex and multiple products are bundled into one bill with greater frequency, the importance of performance and reliability has increased considerably among cable/satellite customers – from 19% in 2006 to 24% in 2007. In addition, service reliability is the most frequently cited reason to switch carriers, with more than 80% of customers reporting they would switch for this reason.

“The cable/satellite market has shifted to a service model based on the voice, video and data triple play,” said Frank Perazzini, director of telecommunications at J.D. Power and Associates. “As providers focus on putting this new model into practice, service reliability – which includes reception clarity and minimizing the number of outages – is critical in maintaining a satisfied customer base.”

Currently, 24% of cable subscribers are bundling voice, video and data services with their provider on a single bill. Future intention to bundle is also strong among cable customers, with 34% indicating they “definitely/probably” would combine all their services – an increase from 33% in 2006.

Satellite providers that offer voice, video and data bundles though strategic alliances with telephone companies also experience increased demand from customers, as 41% of satellite subscribers indicate they “definitely/probably” would combine all their services, compared with 39% in 2006.

“We’ve reached a point where the economics of bundling can’t be ignored, and customers are evaluating features and prices and making informed decisions based on their needs and usage patterns,” said Perazzini.

“While satellite providers in particular face challenges with offering bundled service options – as they are typically not equipped with the same level of technology as cable providers – their strength lies in the reliability of their service. This is most evident in the regional performance of DIRECTV.”

The study also finds that 60% of satellite and 52% of cable customers visit their providers’ website – up from 53% and 41%, respectively, in 2006. Nearly one-half of customers use the internet to pay their bill – 47% of satellite customers and 48% of cable customers.

About the study: The 2007 Residential Cable/Satellite Satisfaction Study is based on responses from 17,033 U.S. households that evaluated their satellite or cable TV provider. The study was fielded in April 2007.

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