Consumers to Cable: You Stink
Consumers aren't happy with their TV providers. Cable and satellite
television companies have scored the lowest of any sector of industry
in the latest American Consumer Satisfaction Index.
The two industries together
score 62 on the 2007 index. Although they're up a point from last year,
they're actually down a point from their average going back to 2002.
To get an idea of how bad a score of 62 is, look at other industry sectors. Airlines score a point higher, at 63. The U.S. Postal Service: 72. Banks: 77. Health insurance: 72. Cigarettes: 78!
A commentary
by Prof. Claes Fornell of the University of Michigan cites several
reasons for the abysmal performance. One is reliability. When companies
win new customers via acquisition, integrating them may cause bumps in
service. And consumers who sign up for the hot triple-play packages get
upset when they discover outages affect more than one service at a time.
Another factor cited by Fornell is "monopoly-like pricing in the cable
industry: basic cable services rose 5 percent in 2006 and 93 percent
over the past decade, nearly four times the rate of overall consumer
prices during the period. Such pricing power usually comes with some
level of monopoly protection and most cable companies have little
competition at the local level. This also means that a cable company
can do well financially even though its customers are not particularly
satisfied."
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