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Higher Overall Satisfaction with Alternative Video Services Motivates Customers to Cut the Cord, J.D

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Higher Overall Satisfaction with Alternative Video Services Motivates Customers to Cut the Cord, J.D Higher Overall Satisfaction with Alternative Video Services Motivates Customers to Cut the Cord, J.D. Power Finds AT&T and Verizon Receive Multiple Awards across Product Segments, Regions NEW YORK: 29 Sept. 2016 — Overall satisfaction with alternative video services such as streaming and transactional-based OTT (over the top) offerings is considerably higher than it is with traditional pay television service, spurring an increase in cord-cutting from 2015, according to three J.D. Power studies released today. The related studies are the J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM; the J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction StudySM; and the J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study.SM The annual wireline studies, now in their 15th year, evaluate residential customers’ experiences with TV, internet and phone services in four geographical regions: East, South, North Central and West. The ISP and telephone studies measure customer satisfaction across five factors: network performance and reliability; cost of service; billing; communication; and customer service. The TV study measures satisfaction in those same five factors plus a sixth: programming. Satisfaction is calculated on a 1,000-point scale. The TV study finds that, compared with pay TV service providers, satisfaction is significantly higher with paid streaming video services like Netflix, Amazon and Hulu; skinny bundle offerings like SlingTV and PlayStation Vue; and programming apps like HBO Go. For example, customers rate their primary alternative video service higher than their TV service for the overall experience (7.92 vs. 7.18, respectively, on a 10-point scale), which is largely driven by much higher ratings for the overall cost of service experience (7.99 vs. 6.42). Customers also rate their primary alternative video service higher than their TV service for the overall performance and reliability (7.98 vs. 7.82), programming (7.87 vs. 7.76) and billing (8.04 vs. 7.54) experiences. Subsequently, with relatively low prices and increasing rates of adoption, alternative video services are helping drive the cord-cutting trend. Nearly two-thirds (63%) of customers have used an alternative video service in the previous year, up from 58% in 2015. Additionally, 73% of customers who plan to cut the cord on TV service in the next year indicate they will use an alternative video service. “This finding partly reflects age demographics since younger customers are more likely to use alternative video services than older customers, and younger customers are more satisfied with alternative TV service than older customers,” said Kirk Parsons, senior director and technology, media & telecom practice leader at J.D. Power. “Despite their higher satisfaction, customers who have used an alternative video service in the previous year are much more likely than those who haven’t used one—14% vs. 4%—to cut the cord on TV in the next year.” However, customers who cut the cord on TV are not necessarily lost for TV providers, and increasing their satisfaction raises the likelihood that they will reactivate TV service or upgrade their internet service in the future. Among customers who plan to drop TV service during the next 12 months, 44% say they expect to reactivate it during certain times of year. Overall satisfaction among customers in this group is 845, compared with 575 among those who do not plan to reactivate TV service and 561 among those who don’t know if they will reactivate it. Key Study Findings Residential Television Service Provider Satisfaction Study AT&T U-verse/DIRECTV ranks highest in TV customer satisfaction in the East (782) and South (764) regions; Verizon FiOS (776) ranks highest in the West region; and DISH Network (747) ranks highest in the North Central region. Among customers who switched providers in the previous 12 months, the most commonly cited reasons for switching are “cost was too high” (25%); “moved locations/previous provider not available at new location” (24%); “competitor offered a better deal” (17%); and “customer service was poor” (10%). Residential Internet Service Provider Satisfaction Study Verizon ranks highest in ISP customer satisfaction in the East (735), South (755) and West (755) regions; AT&T (717) ranks highest in the North Central region. Slightly more than one-third (34%) of customers purchase premium speed internet. This compares to 37% in 2015 and 27% in 2014. Performance and reliability satisfaction among customers with premium speed internet is 763, while satisfaction among those without premium speed internet is 694. Over a typical three-month period, 42% of customers experienced a website connection error or failure to load (vs. 45% in 2015); 48% experienced a website that was excessively slow to load (vs. 51%); and 36% experienced a general service outage (vs. 37%). The incidence of customers experiencing an email connection error—28%—is unchanged from 2015. Residential Telephone Service Provider Satisfaction Study Cincinnati Bell ranks highest for the first time in telephone customer satisfaction in the North Central region (765); Verizon ranks highest in the East (757), South (766) and West (770) regions. Nearly half (46%) of highly satisfied residential telephone customers (overall satisfaction scores of 900 or higher) say they “definitely will not” switch providers in the next 12 months, compared with only 12% of dissatisfied customers (scores below 550) who say the same. The 2016 U.S. wireline studies are based on responses from 31,072 customers nationwide who evaluated their cable/satellite TV, high-speed internet and telephone service providers. The studies were fielded in four waves: November 2015, February 2016, April 2016 and July 2016. For more information about these three J.D. Power studies, visit: http://www.jdpower.com/resource/us-residential-television-customer-satisfaction-study http://www.jdpower.com/resource/us-residential-internet-service-provider-customer-satisfaction-study http://www.jdpower.com/resource/jd-power-residential-telephone-customer-satisfaction-study See the online press release at http://www.jdpower.com/pr-id/2016186. Media Relations Contact Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected] About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info # # # Note: Thirteen charts follow. (Page 2 of 3) J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM Customer Satisfaction Index Ranking East Region (Based on a 1,000-point scale) JDPower.com Power Circle RatingsTM 500 550 600 650 700 750 800 for consumers: AT&T U-verse/DIRECTV 782 DISH Network 763 Verizon FiOS 743 East Average 717 Optimum (Cablevision) 714 Cox Communications 698 XFINITY (Comcast) 679 Time Warner Cable 675 Charter Communications 668 Power Circle Ratings Legend Among the best Better than most About average Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM The rest Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power. J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM Customer Satisfaction Index Ranking North Central Region (Based on a 1,000-point scale) JDPower.com Power Circle RatingsTM 500 550 600 650 700 750 for consumers: DISH Network 747 AT&T U-verse/DIRECTV 741 North Central Average 715 WOW!(Wide Open West) 706 Time Warner Cable 694 Charter Communications 693 XFINITY (Comcast) 682 Power Circle Ratings Legend Among the best Better than most About average Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM The rest Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power. (Page 2 of 3) J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM Customer Satisfaction Index Ranking South Region (Based on a 1,000-point scale) JDPower.com Power Circle RatingsTM 500 550 600 650 700 750 800 for consumers: AT&T U-verse/DIRECTV 764 Verizon FiOS 761 DISH Network 759 South Average 737 Bright House Networks 733 Cox Communications 723 Charter Communications 712 Time Warner Cable 709 XFINITY (Comcast) 701 Suddenlink 696 Power Circle Ratings Legend Among the best Better than most About average Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM The rest Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power. J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction StudySM Customer Satisfaction Index Ranking West Region (Based on a 1,000-point scale) JDPower.com Power Circle RatingsTM 500 550 600 650 700 750 800 for consumers: Verizon FiOS 776 AT&T U-verse/DIRECTV 755 DISH Network 746 West Average 719 Time Warner Cable 702 Cox Communications 695 CenturyLink 694 XFINITY (Comcast) 687 Charter Communications 681 Mediacom Communications 647 Power Circle Ratings Legend Among the best Better than most About average Source: J.D.
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