DBS Rules Power Ranks

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Satellite firms once again crushed their cable rivals in the latest J.D. Power and Associates customer-satisfaction study, which ranked EchoStar Communications Corp., DirecTV Inc. and cable overbuilder Wide Open West LLC ahead of every major cable operator.

Dish Network parent EchoStar was ranked No. 1 in terms of overall customer satisfaction, scoring 725 on a 1,000-point scale. It edged out last year’s winner, DirecTV, which scored 721 points. Dish last won the award in 2000.

WOW scored 715, topping Cox Communications Inc., the highest-rated major cable company, with a score of 698, and the recent top scorer in J.D. Power surveys of customer satisfaction among local and long-distance phone customers.

They were followed by competitive telecom provider RCN Corp. (671) and by Advance/Newhouse Communications-owned Bright House Networks (670), the seventh-biggest U.S. cable company.

SIX FACTORS

J.D. Power based its customer-satisfaction score on six factors — cost of service; customer service; image; performance and reliability; billing; and offerings and promotions. The survey reached 8,668 TV homes.

Other major cable companies ranked below the industry average.

Time Warner Cable scored a 656, followed by Comcast Corp. (633), Insight Communications Co. (632) and Mediacom Communications Corp. (626).

Adelphia Communications Corp., Cablevision Systems Corp. and Charter Communications Inc. were in the basement, tying for last place in the study with a score of 617.

Results from the J.D. Power study come as cable continues to bleed thousands of subscribers to its DBS rivals. DirecTV and EchoStar picked up about 800,000 net new customers during the second quarter, while the major MSOs lost 280,000 subscribers during the same period.

GAP NARROWS

The good news for cable, according to J.D. Power, was that it narrowed the gap in overall satisfaction versus satellite, improving at a rate of 3.1%, compared to a 1.6% satisfaction-rate improvement for DirecTV and EchoStar.

J.D. Power said bundling multiple products and services such as digital cable, phone and Internet services into a single package improves overall customer-satisfaction levels. That was evident in the rankings, for Cox, WOW and RCN, which all focus on selling customers bundled services.

Adelphia placed last in the customer-satisfaction study for a second year in a row. In a memo last Wednesday to employees, Adelphia president Ron Cooper attributed the MSO’s score to its network upgrade and rebuild, a repackaging of its video and cable-modem services and the company image, which he said was affected by the recent federal fraud trial of Adelphia founder John Rigas and his sons, Timothy and Michael.

“Although the Rigases have been separated from the company for over two years, these events have continued to affect our corporate reputation. So it isn’t surprising that some survey respondents allowed the situation to influence their image of Adelphia,” Cooper said.

Comcast moved up to eighth place in the overall customer-satisfaction rankings, compared to No. 11 last year. Executive vice president Dave Watson noted that customer service as a category is weighted more in the overall satisfaction scores this year, which he said bodes well for Comcast.

“We’re pleased that customer service as an area to focus on and to use as a competitive issue, we think is a great long-term strength of ours. We’re in the local communities, we have people that are living and breathing how to provide a better service,” Watson said.

Time Warner Cable chief marketing officer Chuck Ellis also pointed out that cable is narrowing the gap in customer satisfaction with satellite, but acknowledged that the industry needs to improve its customer-satisfaction levels.

“We’re not happy that we aren’t in a different place sooner, but we are absolutely committed to continuing the improvement even at a more rapid level than I think is indicated in the study,” Ellis said.

CTAM ADDRESSING

Ellis and Watson are co-chairs of a new customer care council at the Cable & Telecommunications Association for Marketing, which plans to run a customer care forum in Atlanta on Nov. 17.

CTAM senior vice president of marketing Seth Morrison said the customer-care council has focused on understanding and using metrics to improve customer service; understanding customer touch points; and developing a sales-and-service culture.

The J.D. Power customer-satisfaction study shows there is room for growth, Morrison noted, and he’s optimistic that cable will improve.

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