Telco TV

‘Primetime’ VOD Key to Cable Customer Happiness: Report

10/22/2008 11:33 AM Eastern

Video-on-demand may be cable's best bet for improving customer satisfaction with services, a new report based on a survey suggests.

Parks Associates said a survey of more than 2,700 U.S. and 1,000 Canadian adults in households with broadband Internet access revealed “consistently low” customer satisfaction among cable subscribers. It said satellite TV and telco/IPTV customers are “significantly more likely to be satisfied with their services than both basic and digital cable subscribers.”

Some numbers: 40% of digital-cable subscribers and 35% of basic-cable subscribers give their provider a high satisfaction rating, compared with 51% of satellite-TV customers and 59% of telco-IPTV subscribers, the research firm said.

On the low end of the scale, 12% of basic-cable and 7% of digital-cable subscribers give their provider low marks, compared with 4% of satellite customers and 3% of telco subscribers. (Note: in surveys like these, newer providers generally do better than established incumbents, cable marketing experts say.)

For all TV subscribers, 42% give high satisfaction marks and 7% give low marks to their providers, according to the Parks Associates survey.

Kurt Scherf, VP and principal analyst at Parks, said in a release: "Although cable operators have improved service efforts, cable operators will still hemorrhage subscribers unless they are perceived as offering leading-edge features at equal or better value. In today's economic climate, carriers cannot afford to ignore these findings."

He recommended cable operators position their services as an enhanced and convenient form of entertainment. VOD initiatives, particularly those aimed at delivering a "Primetime, Anytime" experience, should be key elements in this effort, the Parks analyst said in the release.

"Subscribers who actively use primetime VOD services show significantly higher satisfaction levels," Scherf said. "Primetime VOD offerings are potential [revenue] generators and trigger churn toward the provider, a reversal of current market trends."

More numbers from the survey: among digital-cable subscribers who use VOD monthly, 44% give a high satisfaction rating, compared with 37% of digital-cable customers who don’t use VOD. The high-satisfaction percentage rises to 48 among digital-cable customers using VOD weekly.

Magna has estimated there were 39 million VOD-enabled U.S. homes at mid year, about 35% of total TV households.

The report is called “TV 2.0: The Consumer Perspective.”

September