May 20, 2014
Time Warner, Comcast Top The Heap Of Most Hated US Companies
Peter Suciu for redOrbit.com - Your Universe Online
Some might say it is a match made in heaven. While the merger between the nation's number one and two cable companies is still far from a done deal, on Tuesday Comcast and Time Warner Cable were named the most hated companies in America.According to the American Customer Satisfaction Index, which is put out quarterly by the University of Michigan's Ross School of Business and is often considered the most comprehensive customer satisfaction survey in the United States, the two cable giants have the lowest customer satisfaction ratings of any ISPs in the nation.
Overall, the cable industry is not well liked it seems. Whilst the average companies score in the high 70s on the index (out of 100) – which in school terms is still a "C" – subscription TV companies scored just 65 on the index. This includes traditional cable companies as well as fiber optic and satellite cable operators. Only Internet companies scored worse at 63 – but it is worth adding that many of the cable companies are also Internet Service Providers so it can be impossible to differentiate between the two.
The ACSI also found that customer satisfaction with subscription-TV services fell 4.4 percent in just the last year while Internet companies declined 4.1 percent.
Cable giants Comcast and Time Warner had the most dissatisfied customers, and both saw declines in user satisfaction. Comcast fell five percent to 60, while Time Warner registered a seven percent decline to 56. That is its lowest score to date. Cox Communications, which also fell three percentage points, was the highest cable company with a score of 63.
Fiber optic and satellite services fared a little better. DirecTV lost four points while AT&T – which is in talks to buy the satellite TV provider – lost three points; both had ACSI scores of 69. Verizon Communications' FiOS scored 68, while DISH Network scored 67.
This isn't exactly new news either. Price was deemed a factor; the cost of subscription TV rose six percent on average – four times the rate of inflation.
"It's consistently been that way," ACSI managing director David VanAmburg told MarketWatch. "It eats up a big chunk of the household budget…renters pay more for that than energy. Combine these high prices with issues of reliability and there’s a value for the money problem."
Perhaps the ISPs and cable companies should look to mobile phones. In fact, while many of the same companies are in multiple businesses, consumer satisfaction with cell phones improved to 2.6 percent to a score of 78 while wireless phone service remained unchanged for the year at 72.
Consumers are finding alternatives to the traditional pay TV services as well.
"The Internet has been a disruptor for many industries, and subscription TV and ISPs are no exception," said Claes Fornell, ACSI chairman and founder, in a statement. "Over-the-top video services, like Netflix and Hulu, threaten subscription TV providers and also put pressure on ISP network infrastructure. Customers question the value proposition of both, as consumers pay for more than they need in terms of subscription TV and get less than they want in terms of Internet speeds and reliability."
These findings come shortly after AT&T announced its plans to acquire DirecTV, and Comcast's plans to buy Time Warner. The two cable giants have the most dissatisfied customers, but perhaps the merger could help their scores.
"Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories," VanAmburg added in a statement. "Still, it's a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers."
Some have already noted that it takes a lot to come in so low in the ACSI rankings.
"What’s most amazing is that both Comcast and TWC have even lower customer satisfaction ratings than United Airlines, which has a notoriously bad reputation in an industry that, due in part to government security requirements, is known for delivering a miserable experience," Brad Reed wrote for BGR. "Other notable companies that had higher customer satisfaction scores than Comcast and TWC included Bank of America, perennially unpopular wireless carrier Sprint, health insurance giant Aetna and the Los Angeles Department of Water and Power.
"It's unfortunate that ACSI didn't ask how people felt about Skeletor, Gargamel and Cobra Commander, because we get the feeling that Comcast and TWC would have had lower ratings than them as well — after all, if you're more unpopular than major airlines, health insurance companies and even monopolistic utility companies, then being more disliked than '80s cartoon super-villains doesn't seem like much of a stretch," Reed added.