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Rate Hikes Fuel Pay TV Subscriber Discontent: Survey

Only 0.8% of Cable, Satellite Customers Have 'Cut the Cord' in Last 12 Months, According to Poll 3/01/2013 5:56 AM Eastern

While just 0.8% of pay TV subscribers surveyed said they canceled their cable or satellite TV service in the last 12 months, steady price increases are a major factor prompting millions to ponder pulling the plug, according to a new study.

The survey, commissioned by video search and discovery vendor Digitalsmiths, found that about 80% of pay TV customers are satisfied with the value provided by their current provider.

Of the 20% of respondents who were dissatisfied, 68% cited increasing fees as a reason they were unhappy. About 45.5% of all pay TV customers said their cable, satellite or telco TV bills were higher than a year ago; 38.9% pay about the same and 16.6% said their bills had gone down.

Pay TV providers are acutely aware of the issue and are struggling to find ways to address it. Most recently, Cablevision Systems this week sued Viacom, alleging the media company’s wholesale bundling violated antitrust laws; Viacom responded that the MSO was trying to use the courts to renegotiate their December 2012 carriage deal.

Within the next six months, 1.3% of current pay TV customers said they plan to switch to an online service like Netflix in lieu of cable or satellite while 4% said they simply planned to drop pay TV altogether, the Digitalsmiths survey found.

Whether they actually do “cut the cord” is another question, but if nothing else the results show simmering consumer frustration with traditional subscription television among a segment of the population.

Besides increasing rates, unhappy pay TV customers also blamed “bad channel selection” (34%); poor TV quality (34%); and bad customer service (30%) for their dissatisfaction. Other less-cited reasons included “having to pay for hundreds of channels I don’t watch” and a poor user interface.

The online survey polled about 1,850 adults in the U.S. and Canada aged 18 and older between Jan. 25 and Feb. 1, 2013. Digitalsmiths commissioned the survey from a “major” third-party research firm, which a spokeswoman declined to identify. The report is available here.

The study also examined app usage and TV search and discovery perceptions. According to the survey, 32% of tablet users said they have downloaded one or more TV network apps (such as HBO Go or WatchESPN) and of that group, 22% said they use the apps daily.

Asked how often they grew frustrated trying to find something to watch on TV, 27% said “never” and 54% said “sometimes,” while 12% claimed it “always” happens and the remainder didn’t know or didn’t say.

Customers of Durham, N.C.-based Digitalsmiths include Time Warner Cable, Turner Sports, Univision and Warner Bros.

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