Studies Differ On Cable, DBS Sub-Approval Levels

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A pair of studies released last week that gauged how subscribers rate cable or direct-broadcast satellite services turned up different levels of customer approval.

Satisfaction among digital-cable subscribers slipped last year, while satellite customers maintained their enthusiasm for the delivery system, according to the 2004 edition of Horowitz Associates Inc.'s State of Cable & Broadband.

The following day, new findings from Leichtman Research Group, Inc. found overall levels of satisfaction for cable and DBS subs remained statistically unchanged from the prior year.

According to the Horowitz study, which was conducted via 1,653 phone interviews last November and December, 58% of digital-cable respondents characterized their overall service as "excellent", versus 65% the prior year. Relative to cable's service packages, 43% of digital subscribers expressed that level of satisfaction, as opposed to 51% the year before.

For their part, satellite subscriber respondents accorded marks of 75% and 60% for overall satisfaction and package, respectively, year to year.

When presented with a side-by-side comparison, 47% of current digital-cable subscribers said they would keep their service, while 6% indicated they might go to satellite. Conversely, 65% of current satellite subs weren't going anywhere, while 4% expressed interest in migrating to cable.

Elsewhere, the study found that 36% of current digital cable subscribers are willing to pay more for advanced services like a digital video recorder, subscription video on demand, HDTV or a home entertainment network. Only 14% were willing to take a discounted bundle when the services were presented á la carte.

"This year's results present a real 'good new-bad news' story for the operator," said Howard Horowitz, president of Horowitz Associates, in a statement. "While, in general, satellite's lead in satisfaction is mainly attributable to their relatively small base of customers, cable operators might need to consider that some of the aggressive strategies they are using to generate digital upgrades might very well be impacting customer satisfaction in negative ways."

The Leichtman study, "Cable and DBS: Competing for Customers," found that 70% of satellite customers nationwide are very satisfied with their provider, versus 53% of those who felt the same way about their cable company. The LRG report, based on a telephone survey of 1,600 randomly selected households, indicated that the satisfaction levels for cable and DBS remained statistically unchanged from the prior-year study.

Nonetheless, LRG's report indicated that only 11% of cable subs were likely to switch service from their current provider, versus 11% of those on the DBS side.

In another key finding, the report found that only 20% of new DBS subscribers in areas where cable is available had switched from a digital-cable offering.

"Competition between cable and DBS is more intense than ever," said LRG president and principal analyst Bruce Leichtman in a statement. "Beyond filling the pipeline with new subscribers, providers need to increase their on customer retention."

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