June 9, 2014
CBS MoneyWatch - A recent study by consulting firm cg42 found that 53 percent of consumers would leave their cable provider now if they had a viable alternative. What keeps them in place is a lack of choice, as many communities sign exclusive contracts with cable providers.
The study involved interviews of 3,038 current and former customers of Cox, Comcast (CMCSA), Charter (CHTR), Cablevision (CVC), and Time Warner Cable (TWC). Customers held negative views of the companies in several ways.
About 73 percent felt that "cable companies are predatory in their practices and take advantage of consumers' lack of choice," while 72 percent "worry that the larger the cable companies become, the worse off consumers are." Sixty-nine percent of respondents said that there was too little competition among TV providers and 58 percent felt that they had no "real choice" and were "stuck" with their current provider.
Some comments included a Comcast customer claiming that it takes "forever" to get problems resolved and that "the whole experience is so demoralizing/defeating that you just don't have the energy to deal with it anymore so you suffer with crappy service until you can muster the courage to try again." A Cox customer complained that their "bill keeps getting bigger and the service they provide is much less."
Stephen Beck, founder of cg42, told the blog BGR that the level of customer dissatisfaction was "astronomical" and "unmatched by any other industry we've ever examined."
That people are unhappy with cable should be no surprise. According to the American Customer Satisfaction Index, a cross-industry measure of customer satisfaction, of all measured industries, cable comes in at second to the bottom. The only industry that does worse in the eyes of consumers is Internet service providers, and cable companies are typically also ISPs, so the distinction offers little difference. The low ranking has also been fairly constant since 2001, when the category was first broken out.
Creation of mega-providers in the industry continues as Comcast and Time Warner seek permission to merge. The result would be a single company that would have just under 30 percent of all cable subscribers in the country. The 30 percent market share figure is a cap that the FCC had put into place, although courts have twice overturned it.
The customer dissatisfaction numbers help put the fight over so-called net neutrality into a practical context. The cable companies want the ability to charge Internet-based companies additional amounts for higher speed access to cable customers, even though both the Internet companies and customers already pay for access to each other. One concern is that with the growth of streaming services like Netflix (NFLX) and Hulu, consumers could use their cable Internet access as an alternative to cable television offerings. By making delivery more cumbersome and potentially expensive, they could discourage consumers from making a switch.