NEW YORK — Cable operators will have to boost their video-on-demand and high speed data offerings if they’re going to match the growth rate and consumer appeal of DBS rivals.
A report out Friday by JPMorgan based on recent consumer surveys finds that cable rates are rising much faster than those of satellite — one reason why consumers in general are more satisfied with satellite service than cable service.
Report by cable analyst Jason Bazinet follows up a recent J.D. Power study that revealed the gap between cable and DBS customer satisfaction is wider than it has been in the past four years. One result is that subscribers to DirecTV and EchoStar value their services more than cable subs do theirs.
Cox, Time Warner and Cablevision were the only cablers to increase in customer satisfaction, but only Cox, with a 110 satisfaction score, neared the results of satellite systems Dish (116) and DirecTV (118). Same three systems (Cox, Dish and DirecTV) were also tops in last year’s report.
In determining customer satisfaction, criteria of greatest weight is cost of service. Power study illustrated that the average household spends $48.93 per month on satellite vs. $49.62 on cable. In the past five years, the cost of cable has spiked 41%, while that of satellite has increased only 8%.
Historically, customer satisfaction directly correlates to subscriber growth. According to JPMorgan research, basic cable penetration dropped from 61% to 56% in the past three years. Over the past five years, satellite’s share of the multichannel market has grown from 7% to 17%, with roughly 20 million DBS households today.