Pay TV

When Will America Reach Peak Contempt for Big Cable?


In a tradition that surprises no one, the two-headed beast of pay-TV and Internet providers has finished at the bottom of yet another customer satisfaction ranking. You know the story: rising bills, unreliable service, millions of angry Americans. The dismal results are even worse than the nation’s unloved airlines. (Deadly sharks and IRS audit officials were not included in the surveyed industries).

Each new year tends to bring another decline in affection for the purveyors of TV/Internet connection, and the 2014 American Customer Satisfaction Index released this week did not buck the trend. But now the hatred of our Comcasts and Time Warner Cables comes even as executives of those particular companies focus a good deal of attention and resources on improving their customer service efforts as they push for a merger.

Just Wednesday, for instance, at Comcast’s (CMCSA) annual shareholder meeting, Chief Executive Brian Roberts touted new customer service apps and other innovations that have 42 percent of subscribers using self-service tools. That has led to a reduction of 20 million customer calls per year and 13 million fewer “truck rolls” for repairs, he said, and mobile voice apps have helped the company lower the number of repeated service calls. If regulators allow Comcast to close its acquisition of Time Warner Cable (TWC), the merged company will incorporate TWC executives “and help us to reinvent the customer-service experience,” Roberts said.

A big reason that cable-TV and broadband companies—usually one in the same for most Americans—engender such loathing is that they’re monopolies, at least for now. In most cities, you can’t swap Time Warner Cable for Cox or Cablevision (CVC) for AT&T’s (T) U-Verse, leaving a satellite dish on your roof as one of the few alternatives. This is the conventional explanation for our contempt.

But an equally big problem is the industry’s tendency to take customer feedback and incorporate that into broad, companywide benchmarks that typically don’t filter into operations, says Matthew Storm, a director for Nice Systems (NICE), a tech business that helps companies gather data from their customer interactions. (Nice has worked with at least one large cable-TV company it won’t identify.) Such findings “need to come out of the boardroom and off PowerPoint charts, and they need to become operational,” Storm says. “Whenever I get a piece of feedback, someone needs to take action on that and not just roll that into a pretty PowerPoint presentation.”

Storm says that the average of companies that track “first-contact resolution”—their ability to solve a problem the first time a customer raises it—is in the high 80 percent range. Cable TV, on the other hand, languishes in the 70-to-80 percent range.

In the latest American Customer Satisfaction Index survey, which uses a 100-point scale, Time Warner Cable tanked to the lowest spot, at 56, followed by Comcast with 60. Cable companies are so bad, in fact, that Verizon Communications (VZ) has been running television ads touting its relative merit. Verizon’s FiOS service had an index rating of 68 for its television offering and 71 for Internet access. Subscribers are paying more these days for television channels they don’t watch while finding that the same companies’ Internet service often proves unreliable when they try to watch programs they do want online, says Claes Fornell, ACSI’s chairman.

“We know that customers’ expectations continue to rise, and we work very hard to adapt and provide a better service and improve the product,” says Time Warner Cable spokesman Bobby Amirshahi. The company, he adds, has become “much easier to do business with” in recent years as it shortened its appointment windows and began offering technician calls at night. Both TWC and Cablevision, for example, have dramatically improved their Internet speeds in many locales over the past two years. But if you’ve had lousy experiences with your cable company for 20 years, amid ever-rising bills, your views of that company’s value are likely biased—and not in a kindly way.

Still, as the pay-TV industry evolves into one less beholden to channel bundles and experiments with delivering content via the Internet, there’s reason to think that telecom behemoths such as Comcast, Cox, and AT&T will actually do better. They will need to sell us more, while the competition for our cash will grow fiercer. “I think this monopoly era is on its way out,” Storm says. “Loyalty just wasn’t as important in the past as it is now.”

Bachman is an associate editor for Businessweek.com.

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Companies Mentioned

  • CMCSA
    (Comcast Corp)
    • $54.63 USD
    • 0.81
    • 1.48%
  • TWC
    (Time Warner Cable Inc)
    • $149.15 USD
    • 2.70
    • 1.81%
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