A report we just published analyzes the findings from a nationwide survey of 856 US Digital Pay Television consumers. In it, we look at satisfaction for key performance metrics, analyze customer willingness to churn, and look at the role of the bundle in mitigating churn. This is presented at both an overall and platform-level (including Cable, Satellite and TelcoTV / IPTV). A few key findings from the report:
Digital Television Satisfaction is High Overall, but Cable is Still Vulnerable
Seventy-one percent of respondents in the survey reported to be "somewhat" or "very" satisfied with their current service. While this may seem like positive news for the digital television industry, the story changes somewhat when viewed at the individual platform level.
The differences among Cable, Satellite, and IPTV were impressive, with Telco/IPTV customers reporting 95% overall satisfaction, compared to 67% for Cable. Cable
underperformed in virtually every satisfaction metric.
Low Perceived "Value for Money" among all Digital Pay TV customers
Virtually across the board—and irrespective of platform—respondents reported low satisfaction in the metric of `Value for Money.' There was very little measurable difference by platform among respondents, and in all cases,
fewer than 22% of respondents felt the service "exceeded" or "greatly exceeded" expectations of value for money.
This is among the most important findings of study, as it underlines the vulnerability of pay television in its current state. Indeed, in a report
published in 2008, we found that over 50% of US digital pay television customers would be willing to scale back or completely drop their television service if household budgetary circumstances dictated.
Cable Customers Most Willing to Jump Ship
Despite a high stated satisfaction rate, digital television respondents displayed relatively high price elasticity. A somewhat surprisingly high percentage of respondents indicated a willingness to switch providers when offered a competitive deal 10% or 20% cheaper than their current spend.
Cable customers displayed the highest propensity to churn, with 47% saying they would switch for a 10% price discount. When the price discount was raised to twenty percent, over two-thirds (68%) said they were willing to jump ship.
Malaise? Angst? Ennui?
Whatever it is, it doesn’t feel good.
Despite a rather high stated satisfaction level, pay television customers in our survey indicated a substantial willingness to churn, and a general feeling that they were not getting high value for money from their television service provider. Both of these factors further underline the threat that Over-the-Top (OTT) distribution poses to traditional service providers.
Among platforms, IPTV appears to being doing best in terms of satisfaction and anticipated growth. Its success, however, is not a foregone conclusion.