Tuesday, December 20, 2016

U.S. Consumers Not Too Happy with Linear Video or Internet Access, Never Have Been, ACSI Data Suggests

With the important caveat that some service providers do much better than others, U.S. consumers generally do not say they are exceptionally happy with their internet access or video services. They never have been.

Customer service provided by U.S. cable TV providers likely has improved quite a bit over the last 30 years, and definitely over the last 40 years. Still, linear video service never has gotten much love from consumers, as video service virtually always ranks low on multi-industry satisfaction indices.

One might argue that, for all the progress, consumers still are not terribly satisfied. U.S. consumer satisfaction with subscription video ranks at 65 out of 100, among the very lowest scores for any consumer product.

Mobile services rank higher, across the board, with an industry average of 71 out of 100.

Internet access services, sold by the same entities, ranks lower than video or mobile, at an average of 64, earning the absolute lowest scores of any product tracked by the American Customer Satisfaction Index.

It is fair to note that there is more variation within categories (companies providing video, internet access or mobile service) than there is between different industries. The absolute highest average score is earned by TV suppliers (87 or 100), compared to an average score of 65 in the linear video subscription category. The lowest industry score in earned by the ISP business, at 64, a dynamic range of 23 points.

The best and worst mobile providers differ by just seven points. ISP satisfaction ranking vary by 17 points, high to low. Video service satisfaction varies by 16 points, high to low.

Fixed network voice scores vary by about 14 points, high to low, with an average industry score of 70.  

I cannot really explain why the fixed network services tend to generate less satisfaction than mos other products, other than to point to impressionistic evidence (consumers or businesses complaining about incorrect billing, overcharges, lack of responsiveness).

Once upon a time, service availability was far worse, with noticeable number of service outages every year. It has been argued that, aside from network outages caused by power outages or equipment failure, consumers notice immediately if their TV goes out, but might not notice if their phone stops ringing.

Given that TVs might be “on” for seven or more hours a day, while phones actually were used for minutes a day, there is some logic to that argument. If a phone did not ring, a customer would logically simply assume nobody was calling.

But almost every process related to linear video has gotten much better over the last 40 years, including network performance, billing and customer service performance.

Some four decades ago, most urban cable TV systems were under construction for the first time, meaning there was significant disruption of existing life, and the ever-present danger of accidents.

Over the next 30 years a process of acquisition also meant there was going to be a chance of customer service irritation as staffs and processes changed, billing systems were revamped and databases merged.

The all-copper networks were prone to outages, when built, for reasons having to do with the concatenation of failure points (amplifiers in series). Cable operators generally were cash strapped and arguably under-investing in customer service operations. It would not have been unusual to wait all day for an install. More recently, install windows moved to four hours, and in some cases even two hour windows.

The hybrid fiber coax architecture, meanwhile, has dramatically improved network availability performance.

Some will point to rate increases as a big source of irritation. If so, then wider adoption of “skinny bundles” and streaming services could move the needle.

Still, it remains a bit of a puzzle why the subscription services, with the exception of mobile service or even fixed network voice service, always ranks so low.

Some will suggest that is at least in part because the customer has to keep paying every month. Others might argue the receipt of the bill is a constant reminder to the customer of the value-price proposition. But that also is true of groceries or supermarkets, fuel and utilities and personal services. And none of those products are ranked as low as internet access or video subscriptions (on average).

Ironically, though the linear video experience is unquestionably much better, satisfaction has not grown too much. For some of the suppliers, virtually no improvement has been seen over the last 15 years.

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