ANN ARBOR — People just don’t like their cable TV, phone and Internet providers.
That’s the rather bleak news from the latest American Customer Satisfaction Index scores for information services, including subscription TV, internet, wireless and wireline telephone, and computer software.
The ACSI was developed by the University of Michigan and is based in Ann Arbor.
The overall information industry’s score dropped 3.4 percent over the past year to 68.8 on the ACSI’s 0 to 100 scale. That’s lower than satisfaction rates of health insurance companies, and getting close to satisfaction rates with federal government services.
Customer satisfaction rate with cable and satellite TV services tumbled to 63, tied with internet service providers – the worst score among 43 industries covered by the Index.
ACSI data, which is based on 14,176 customer surveys collected in the first quarter of 2015, show the decline results from poor customer service combined with higher prices.
“There was a time when pay TV could get away with discontented users without being penalized by revenue losses from defecting customers, but those days are over,” said Claes Fornell, ACSI Chairman and founder. “Today people have more alternatives than ever before. Consumer abandonment of pay TV is shaking up the industry and lower satisfaction could mean even more cord cutting by subscribers ahead.”
Subscription TV: Cable Companies Crash
The ACSI reports huge drops in customer satisfaction for Comcast and Time Warner Cable, following their failed merger. Already one of the lowest-scoring companies in the ACSI, Comcast fell 10 percent to a customer satisfaction score of 54. Meanwhile, Time Warner Cable earns the distinction as least-satisfying company in the nation after falling 9 percent to 51. Joining Time Warner Cable in the basement was ACSI newcomer Mediacom Communications (51), which serves smaller markets in the Midwest and South.
With a 4 percent gain to an ACSI score of 71, Verizon’s FiOS service took the lead from DirecTV (down 1 percent to 68) and AT&T’s U-verse (unchanged at 69). Cablevision Systems entered the ACSI as the highest-scoring large cable company; however, it only tied the lowest-scoring satellite provider, Dish Network, at 67.
Charter Communications (up 5 percent to 63) is going on a merger binge of its own with plans to acquire Time Warner Cable and Bright House Networks (also at 65), which would make it the second-largest cable TV company in the country. Although Charter showed the most improvement in the industry, it may be difficult to maintain customer satisfaction momentum as the company combines operations with other providers. ACSI data suggest that mergers usually result in lower customer satisfaction, at least in the short term.
“Cable companies are trying to strengthen their positions through consolidation, but the benefits to consumers of one coaxial cable company absorbing another are questionable,” said David VanAmburg, ACSI director. “The AT&T-DirecTV merger may be different, however, because it would allow AT&T to deliver TV service via multiple technologies.”
Lack of Choice Leaves Customers Dissatisfied With ISPs
Sixty-one percent of U.S. households have just one or no high-speed Internet provider servicing their region and the lack of customer choice contributes to weak customer satisfaction. Even as Internet usage grows, customer satisfaction with ISPs remained unchanged at an ACSI score of 63 and tied with subscription TV for last place among 43 industries. Customers are frustrated with unreliable service, slow broadband Internet speeds and rising subscription prices –and they resent being locked into service contracts.
Two large ISPs did improve, and their gains were sizeable. AT&T U-verse picked up 6 percent to an ACSI score of 69, taking the lead from Verizon, which fell 4 percent to 68. Time Warner Cable gained 7 percent to 58. Bright House Networks matched the industry average at 63; Cablevision Systems and Frontier Communications debuted at 61.
Several ISPs suffered large drops in customer satisfaction, including CenturyLink (down 8 percent to 60), Cox Communications (down 9 percent to 58) and Charter Communications (down 7 percent to 57). Comcast stayed at the bottom of the category, slipping 2 percent to 56.
Apple Challenges Samsung for Cell Phone Lead; Customers Happiest with No- Contract Wireless Carriers
Customer satisfaction with cell phones was unchanged at 78, the highest score yet for the industry. The majority of new cell phones sold today are smartphones, which generally have higher satisfaction than feature phones. With some of the strongest scores in the entire ACSI, the two largest smartphone manufacturers led the way — Apple and Samsung Electronics. Apple advanced 1 percent to 80, the ACSI’s commonly accepted standard of excellence and tied with Samsung, which fell 1 percent.
“Despite its high-scoring phones, Samsung may find it difficult to chip into Apple’s market share because of the need to overcome the brand appeal that is Apple’s mainstay,” VanAmburg said. “Samsung gained an initial advantage as the first manufacturer to introduce large screens for smartphones, but with the launch of large-screen phones by Apple, its loyal customers have little reason to look elsewhere.”
Nokia, whose devices and services business has been assumed by Microsoft Mobile, was down 3 percent to 75, falling behind Motorola Mobility (up 3 percent to 79). For BlackBerry, only the most satisfied customers remain, which pushed its score up 5 percent to 78.
Apple may share the lead with Samsung in overall scores, but in terms of smartphone devices, Samsung’s Galaxy Note 4 took the lead at 86. Apple does not appear to have gained any advantage from the major redesign of its iconic iPhone in terms of user satisfaction. Several smartphones scored 82: iPhone 6 Plus, iPhone 6, Galaxy S5 and Galaxy Note 3. Motorola’s Moto X was next at 81, followed by the LG G3, iPhone 5 and Galaxy S4 (all 80).
Meanwhile, customer satisfaction with wireless telephone service was down 2.8 percent to 70. The aggregate of smaller wireless companies had the highest customer satisfaction and even showed slight improvement (up 1 percent to 79). Smaller companies tend to be no-contract carriers with lower fees, which many customers see as better value.
In its first year as an ACSI-covered company, the prepaid phone provider TracFone Wireless took the lead at 77. Verizon Wireless dropped 5 percent to 71. Both T-Mobile and AT&T improved to tie at 70, while Sprint fell 4 percent to 65.
Fixed-Line Phone: No Longer Much of a Focal Point
Customer satisfaction with fixed-line telephone service fell 5.5 percent to 69 as landline usage continues to shrink; more than 44 percent of homes now forgo fixed-line service in favor of wireless.
Despite slipping 3 percent to 76, the average ACSI score of smaller local and long distance providers was much better than that of large providers. Vonage and Bright House Networks were near the top of the category (both 73). CenturyLink dipped 1 percent to 70, while Verizon declined 7 percent to 68. Cox Communications dropped 3 percent to tie Verizon and, just a notch below, Cablevision Systems entered the Index at 67.
AT&T’s landline service suffered the most, down 10 percent to 65. Nevertheless, AT&T stayed ahead of both Comcast (down 4 percent to 64) and Time Warner Cable (down 3 percent to 63).
Satisfaction With Computer Software Backtracks
Customer satisfaction with software for desktops and laptops was down 2.6 percent to 74 as the combined score for smaller software manufacturers (including TurboTax and anti-virus programs) dropped 4 percent to 74.
Unchanged at 75, Microsoft still dominates the personal computer market, but consumers are turning to mobile and tablet devices where Microsoft has yet to get much traction. The company’s apps are limited and Microsoft maintains a fairly heavy concentration on traditional software for PCs and corporate systems.
The full report is available for free download at www.theACSI.org.