Satellite Continues To Creep Up On Cable
The number of households subscribing to satellite television has increased dramatically over the past year, with the platform continuing to erode cable’s market share, according to a new report from J.D Power and Associates.
However, despite this strong growth, the research stresses that satellite providers must concentrate on providing customer satisfaction.
Steve Kirkeby, senior director of telecommunication research for J.D Power and Associates, explained: “Although satellite providers continue to gain market share, overall customer satisfaction among satellite subscribers has declined while satisfaction among cable subscribers is up.”
He continued: “Overall, satellite customers are still more satisfied with their service than cable subscribers, but if satellite providers want to continue to attract subscribers away from cable, customer satisfaction is a critical area where they can’t afford to lose ground.”
According to a new survey from TNS Media Research, quality and value of services are more significant drivers of customer retention than the number of channels and digital features offered (see Digital TV Customers Look For Quality And Value In Providers).
TNS claims that only 44% of cable subscribers were committed to their provider, compared to 75% of satellite customers claiming to be committed to their operator.
J.D Power and Associates reveals that the average amount consumers spend monthly on satellite television services continues to be less than cable, with an average of $57.72 per month spent on satellite, compared to $58.51 being spent on cable.
Despite cable and satellite providers actively promoting personal video recorders (PVRS), just 12% of customers currently own a PVR device. However, according to J.D Power and Associates, 41% of consumers indicate that they plan to use one in the future.
Kirkeby said: “Both cable TV and satellite providers are beginning to see the benefits of bundling PVRs with their voice, video and internet services. They can meet this anticipated customer demand, while improving customer satisfaction and increasing average revenue per unit, by offering their subscribers efficient and convenient packages.”
He added: “All our research shows that customers prefer bundles from single providers for convenience, simplicity and a better price for their combined purchases.”
Over the next five years PVRs are set to enjoy massive growth, with penetration expected to reach over 11% of television households worldwide, according to a report from Informa Media (see PVRs Causing Increasing Threat To Advertisers).
The J.D Power and Associates study also found that 21% of consumers report ordering a video on demand (VOD) programme, a drop of 1% compared to last year.
Kirkeby commented: “Clearly the industry needs to continue to educate subscribers about VOD. One of the most compelling findings in the study is the significant increase in overall satisfaction exhibited by users of VOD services compared to non-users, nearly 20 index points.”
He added: “Service providers must do whatever it takes to ensure consumers know the ordering process and charges, if any, associated with VOD. In some instances, cable companies are offering free VOD programming that their customers are apparently unaware of.”
