Cable customer’s continue to be dissatisfied and are likely to leave for telcoTV and DBS competitors unless cable companies react. This according to a new research report from Parks Associates. "Cable subscribers are generally less satisfied, which creates opportunities for satellite and telco/IPTV providers to grab customers," said Kurt Scherf, vice president, principal analyst, Parks Associates. Parks recommends that cable companies address poor satisfaction ratings by offering more and better enhanced services like VoD. "Subscribers who actively use primetime VoD services show significantly higher satisfaction levels," Scherf said.

There have been similar findings by J.D. Power that suggest lower satisfaction for video services among cable subscribers, when compared with telcoTV subscribers. AT&T and Verizon have done a decent job of differentiating their video product on features. Verizon has leveraged the FTTH “advantage” quite well, and AT&T has leveraged features like universal HD and HD DVR set top boxes. Parks’ research findings seem to support this perceived advantage. Maybe the perception of new and better features translates to more customer satisfaction, assuming those features are user friendly and cost competitive. TelcoTV services have apparently achieved that perception – more/better features at the same or better cost. Can they maintain that perception over the long term?

The latest J.D. Power rankings for television service has AT&T U-verse and Verizon FiOS beating cable companies in customer satisfaction. There’s a sense of irony here, because according to J.D. Power, cable companies have been beating phone companies in telephone satisfaction. Payback I guess. AT&T U-verse led the pack, with the highest ratings in three of the four regions, including North Central, West, and South. Verizon FiOS ranked highest in the East region. WOW was the highest rated cable company, finishing second in the North Central region. DirecTV was the highest rated DBS provider, finishing second in the East.

Like the cable companies ratings in voice, telcoTV providers are probably on somewhat of a honeymoon with subscribers. Being the new kids on the block with new features and aggressive promotions tends to leave a “good taste” in the mouth of consumers. These ratings will mean much more after a few more years of competition in many more markets than today.

Using the latest J.D. Power ratings for customer satisfaction on phone service as a barometer, cable companies are not only beating telephone companies at their own game, they are crushing them. There has to be some sense of embarrassment on the telco side. Five factors are examined in determining overall satisfaction with the J.D. Power survey. In order of importance, they are: customer service, performance and reliability, cost of service, billing, and offerings and promotions. Cable voice providers rated higher than telcos in every region of the country. TDS Telecom was the highest rated telco, placing second behind Wide Open West, in the North Central Region. Telcos didn’t place any higher than third in the remaining four regions. The two largest telcos, AT&T and Verizon, ranked below the region average in several regions. Other interesting findings of the survey include:

• Satisfaction levels among customers who use Web channels for service inquiries are higher than satisfaction levels among customers who use a telephone to call a service center. On average, satisfaction averages 641 on a 1,000-point scale among Web users, compared with 626 for telephone users
• Overall satisfaction is higher among customers who bundle two or more services with one provider, compared with customers subscribing to phone service alone
• Satisfaction among "triple-play customers" -- those subscribing to telephone, cable and Internet service -- is 23 index points higher than among those customers subscribing to just phone service

I can hear the spin masters now explaining why cable is winning this satisfaction battle. Arguments will be made that cable is on a “honeymoon” with customers because they’re relatively new to the scene and are aggressively competing on price. There is some truth to that, but if there were ever a wakeup call to telcos, this should be it. Cable is beating telco at their own game – handily. We’ve known for some time that it’s easier for cable companies to add voice than for phone companies to add video, perhaps giving them a tangible advantage. It looks like cable is leveraging that advantage to the fullest. I have to admit that I was amazed at how easy it was to switch my phone service to Comcast last year. The technician came in (on time even), and within 30 minutes, had completely siphoned my $90 monthly ARPU contribution to Verizon, and handed an even better monthly ARPU of $140 on a silver platter to Comcast. I was floored by how uneventful the process was and how quickly the switch was made. Give cable their due. They have taken on the challenge of voice service quite competently, and appear to be having great success with it. These J.D. Power results only add to the evidence.

The latest J.D. Power customer satisfaction ratings for Internet service have telcos leading cable companies in customer satisfaction for broadband service. Qwest was rated highest in the west and Verizon in the north central region. Earthlink performed well, receiving the highest ratings in the south and east regions. No cable company led in any region, but Cablevision placed second in the east, ahead of Verizon. Surprisingly, dial-up Internet subscribers indicated a higher customer satisfaction rating than broadband subscribers. The J.D. Power study measures customer satisfaction with high-speed and dial-up Internet service providers based on seven factors: performance and reliability; image; cost of service; offerings and promotions; billing; customer service/technical support; and e-mail services.

We live in a strange world these days. Not too long ago, J.D. Power released telephone customer satisfaction ratings that had cable companies leading telephone companies. Now it’s payback time. A recent research study by ChangeWave Research has Verizon topping video satisfaction, leading all cable companies. AT&T didn’t come in number two, but does lead Cox, Cablevision, Time Warner and Charter in customer satisfaction. DirecTV and Dish Network led all cable companies as well.

While these customer satisfaction studies are revealing, we will really need to view them over time before drawing firm conclusions. Consumers often engage in a “honeymoon” phase with new providers, rewarding them with high satisfaction rates early on. Both cable and telecom are relatively new to each other’s game, and are doing their best to impress new customers. Their ability to sustain high satisfaction over time will be much more of a challenge. Those who succeed will certainly gain a competitive advantage.

Check out this Hollywood Reporter article for more info on the study.

A Verizon commissioned research study reveals that Verizon subscribers are more satisfied with Verizon, compared with cable MSO customer satisfaction with their respective cable company. Verizon hired an independent research company to conduct the study. A key metric Verizon is touting is likelihood for customers to recommend a telecom bundle to friends. They report 40% of Verizon customers said they were very likely to recommend Verizon bundles to others. Comparable numbers were just over 31% for Cox, 28% for Time Warner, 25% for Cablevision, 24% for Charter and 23% for Comcast.

Other interesting results reveal likelihood to switch providers. A third or more of the customers of Comcast, Cablevision, Cox and Charter, and more than a quarter of Time Warner customers said they were likely to switch providers. By comparison, the research reports that 18% of Verizon customers are likely to switch providers.