Auto Purchasing Survey (TQ462)

ChangeWave Research: Home TV Service Providers Trends

TV Service Provider Trends

Andy Golub

Overview: During June ChangeWave surveyed 2,394 consumers on their TV service providers – including a look at the services respondents plan on upgrading and downgrading such as DVRs, premium channels and subscription packages.

The survey also focused on customer satisfaction, loyalty and future demand trends for the major traditional TV service providers. ChangeWave Research is a service of 451 Research.

TV Subscription Upgrades and Downgrades

There is a wide selection of television services being offered by TV providers, but which features are getting upgraded or downgraded?

Among the 4% of respondents who say they’ll be adding or upgrading TV services in the next 90 days, 27% plan a DVR Upgrade and 25% say they’ll add a Premium Sports Package.

Which of the following TV services - if any - do you plan on adding to your TV subscription over the next 90 days? (Check All That Apply)

At the same time, 9% say they’ll downgrade or remove TV services from their subscription in the next 90 days – with Premium Movie Channels (47%) and TV Channel Packages (43%) most likely to get cut.

And which of the following TV services - if any - do you plan on downgrading or removing from your TV subscription over the next 90 days? (Check All That Apply)

The survey took a closer look at these two categories, starting with premium movie channels.

· Premium Movie Channels. Among respondents who currently subscribe to a premium movie channel, the two most popular are HBO (76%) and Showtime (58%). And while Movies (49%) are the most important reason why consumers subscribe to premium movie channels, somewhat surprisingly Original Content (38%) is a close second.

Moreover, in a finding that points to vulnerability for the movie channels, only 45% of respondents who subscribe to a premium movie channel believe they provide a wide variety of movies on a weekly basis – another sign of the importance of original content.

The trend towards original content is also being bolstered by offerings from alternative TV providers. For example, Netflix recently signed an exclusive deal with DreamWorks for 300 hours of original programming. An upcoming ChangeWave report will be taking a close up look at the competition in the Alternative TV space.

· TV Channel Packages. It’s not unexpected that TV Channel Packages are near the top of the list of services respondents plan on downgrading, as Too Many Unwanted Channels (31%) ranks as the biggest problem consumers report having with their TV service provider.

The survey also focused on customer satisfaction, loyalty and future demand trends for the traditional TV providers.

Customer Satisfaction

Consistent with previous ChangeWave surveys, Verizon FiOS (37% Very Satisfied) leads the industry in customer satisfaction among the major TV service providers.

Bright House (28%) has moved into second, followed by AT&T U-verse (26%).

DIRECTV (25%) has fallen to fourth place, registering its lowest Very Satisfied rating of the past two years.

Biggest Problems. As mentioned above, Too Many Unwanted Channels (31%) tops the list of complaints consumers have with their TV service provider – increasing 2-pts to its highest level of the past 18 months.

Outages and Service Issues (9%) is the next closest complaint.

Among individual providers, there are clear differences when it comes to these problems, as can be seen in the charts below:

Too Many Unwanted Channels (31%) Outages/Service Issues (9%)

Cablevision (20%) has the fewest subscribers complaining about Having Too Many Unwanted Channels, while DISH Network (41%) has the most.

Verizon FiOS (5%) outperforms on the issue of Outages/Service Issues and Cox (13%) lags.

Customer Loyalty Towards Traditional Providers

We also asked respondents about their plans to switch TV providers in the next six months, and found 9% saying they’ll make a change – the same as the previous three surveys.

Bright House now leads in customer loyalty – with only 6% of their subscribers saying they’ll switch providers in the next six months. This is the best loyalty rating for Bright House over the past three years.

Verizon FiOS (7%) is a close second, followed by Comcast (8%) – which has also hit its best level of the past three years.

Impact of Price Among Switchers. Price (68%) remains unchanged at its highest level in a ChangeWave survey as the dominant reason why respondents plan on switching providers.

Reinforcing the importance of cost, four-in-five (80%) planned switchers say their current provider could keep them as a customer if their subscription price was lowered.

Future Demand Trends among Traditional Providers

Among respondents planning on switching providers in the next six months, DIRECTV (19%; up 3-pts) is now the top choice, followed by Verizon FiOS (16%; unchanged).

*Other = 17%; Don’t Know = 8%

We note that DIRECTV and Verizon FiOS have been jockeying for the lead in terms of future demand preferences of switchers for the past several years:

Third place Comcast (11%; unchanged) remains at its highest level in a ChangeWave survey.

Summary of Key Findings

The ChangeWave Research Network is a group of 25,000 highly qualified business and technology professionals – along with early adopter consumers – who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Summary of Key Findings 7

The Findings 9

TV Subscription Upgrades and Downgrades 9

Customer Satisfaction 12

Customer Loyalty Towards Traditional Providers 16

Future Demand Trends among Traditional Providers 17

ChangeWave Research Methodology 21

About ChangeWave Research 21

About 451 Research 21

The Findings

Introduction: During June ChangeWave surveyed 2,394 consumers on their TV service providers – including a look at the services respondents plan on upgrading and downgrading such as DVRs, premium channels and subscription packages.

The survey also focused on customer satisfaction, loyalty and future demand trends for the major traditional TV service providers. ChangeWave Research is a service of 451 Research.

TV Subscription Upgrades and Downgrades

There is a wide selection of television services being offered by TV providers, but which features are getting upgraded or downgraded?

Among the 4% of respondents who say they’ll be adding or upgrading TV services in the next 90 days, 27% plan a DVR Upgrade and 25% say they’ll add a Premium Sports Package.

Which of the following TV services - if any - do you plan on adding to your TV subscription over the next 90 days? (Check All That Apply)

Current Survey Jun’13
DVR Upgrade / 27%
Premium Sports Packages (e.g., NFL Sunday Ticket, ESPN Game Plan) / 25%
Access to HD Content/Channels / 17%
Premium Movie Channels (e.g., HBO, Showtime) / 14%
Upgrade TV Channel Package / 14%
Access to OnDemand Content / 8%
Access to 3D Content / 6%
Other / 10%

And which of the following TV services - if any - do you plan on downgrading or removing from your TV subscription over the next 90 days? (Check All That Apply)

Current Survey Jun’13
Premium Movie Channels (e.g., HBO, Showtime) / 47%
Downgrade TV Channel Package / 43%
Premium Sports Packages (e.g., NFL Sunday Ticket, ESPN Game Plan) / 14%
Access to OnDemand Content / 4%
Access to 3D Content / 4%
Access to HD Content/Channels / 3%
DVR / 3%
Other / 7%

The survey took a closer look at these two categories, starting with premium movie channels.

· Premium Movie Channels. Among respondents who currently subscribe to a premium movie channel, the two most popular are HBO (76%) and Showtime (58%).

Among those who subscribe to a premium movie channel, which of the following do you currently subscribe to? (Check All That Apply)

Current Survey Jun’13
HBO / 76%
Showtime / 58%
Starz / 43%
Encore / 42%
The Movie Channel / 39%
Cinemax / 35%
Epix / 6%
Other / 2%

And while Movies (49%) are the most important reason why consumers subscribe to premium movie channels, somewhat surprisingly Original Content (38%) is a close second.

What is the most important reason you subscribe to premium movie channels?

Current Survey Jun’13
Movies / 49%
Original Content / 38%
Documentaries / 2%
Other / NA / 10%

True or False: Premium movie channels provide a wide variety of movies on a weekly basis.

Currently
Subscribe
to a
Movie channel
True / 45%
False / 55%

· TV Channel Packages. It’s not unexpected that TV Channel Packages are near the top of the list of services respondents plan on downgrading, as Too Many Unwanted Channels (31%) ranks as the biggest problem consumers report having with their TV service provider.

The survey also focused on customer satisfaction, loyalty and future demand trends for the traditional TV providers.

Customer Satisfaction

Consistent with previous ChangeWave surveys, Verizon FiOS (37% Very Satisfied) leads the industry in customer satisfaction among the major TV service providers.

Bright House (28%) has moved into second, followed by AT&T U-verse (26%).

DIRECTV (25%) has fallen to fourth place, registering its lowest Very Satisfied rating of the past two years.

Satisfaction Rating by Individual Provider – ‘Very Satisfied’ Rating

Current
Survey Jun ‘13 / Previous
Survey Mar ‘13 / Previous
Survey Dec ‘12 / Previous
Survey Sep ‘12 / Previous
Survey
Jun ‘12
Verizon FiOS / 37% / 37% / 39% / 39% / 39%
Bright House / 28% / 29% / 29% / 28% / 21%
AT&T U-Verse / 26% / 20% / 25% / 25% / 32%
DIRECTV / 25% / 29% / 31% / 28% / 30%
DISH Network / 21% / 19% / 20% / 20% / 20%
Cablevision / 18% / 13% / 14% / 16% / 12%
Cox / 14% / 19% / 14% / 16% / 15%
Comcast / 12% / 11% / 15% / 11% / 15%
Charter / 12% / 11% / 9% / 5% / 7%
Time Warner / 6% / 9% / 9% / 8% / 8%

Biggest Problems. As mentioned above, Too Many Unwanted Channels (31%) tops the list of complaints consumers have with their TV service provider – increasing 2-pts to its highest level of the past 18 months.

Outages and Service Issues (9%) is the next closest complaint.

Among individual providers, there are clear differences when it comes to these problems, as can be seen in the charts below:

Too Many Unwanted Channels (31%) Outages/Service Issues (9%)

Cablevision (20%) has the fewest subscribers complaining about Having Too Many Unwanted Channels, while DISH Network (41%) has the most.

Verizon FiOS (5%) outperforms on the issue of Outages/Service Issues and Cox (13%) lags.

What is the biggest problem you currently experience with your TV Service Provider?

Current Survey Jun ‘13 / Previous
Survey Mar ‘13 / Previous
Survey Dec ‘12 / Previous
Survey
Sep ’12 / Previous
Survey
Jun ‘12
Too Many Unwanted Channels / 31% / 29% / 26% / 28% / 28%
Outages/Service Issues / 9% / 7% / 8% / 9% / 8%
Lack of Good Programming/Channels / 8% / 8% / 8% / 8% / 9%
Don’t Like Menu Structure / 6% / 5% / 5% / 6% / 6%
Too Slow When Changing Channels / 5% / 6% / 7% / 6% / 7%
DVR Issues / 4% / 4% / 5% / 5% / 4%
Not Enough HD Content / 2% / 1% / 2% / 2% / 3%
Not Enough On Demand/Pay Per View Content / 2% / 1% / 2% / 1% / 2%
Channel Blackouts (due to licensing disputes) / 1% / 1% / 1% / 1% / 1%
Do Not Experience Problems / 15% / 16% / 17% / 16% / 17%
Other / 9% / 11% / 9% / 12% / 10%

Here’s a look at the complete results by individual provider:

Current Survey (Jun ’13)

Total / Bright House / Cable-
vision / Charter / Comcast / Cox / Time Warner / DIRECTV / DISH Network / Verizon FiOS / AT&T
U-Verse
Too Many Unwanted Channels / 31% / 40% / 20% / 37% / 36% / 31% / 29% / 34% / 41% / 31% / 37%
Outages/Service Issues / 9% / 6% / 6% / 10% / 7% / 13% / 12% / 11% / 9% / 5% / 7%
Lack of Good Programming/
Channels / 8% / 6% / 11% / 7% / 10% / 12% / 9% / 6% / 7% / 7% / 3%
Don’t Like Menu Structure / 6% / 8% / 17% / 8% / 6% / 5% / 4% / 5% / 2% / 10% / 9%
Too Slow When Changing Channels / 5% / 8% / 14% / 5% / 4% / 2% / 7% / 10% / 2% / 8% / 5%
DVR Issues / 4% / 6% / 3% / 1% / 4% / 8% / 9% / 3% / 5% / 4% / 5%
Not Enough HD Content / 2% / 0% / 0% / 4% / 2% / 0% / 2% / 1% / 1% / 2% / 0%
Not Enough On Demand/ Pay Per View Content / 2% / 0% / 0% / 0% / 1% / 3% / 0% / 2% / 1% / 5% / 1%
Channel Blackouts (due to licensing disputes) / 1% / 0% / 2% / 0% / 0% / 0% / 3% / 2% / 2% / 1% / 3%
Do Not Experience Problems / 15% / 14% / 23% / 9% / 12% / 9% / 15% / 12% / 13% / 17% / 22%

Customer Loyalty Towards Traditional Providers

We also asked respondents about their plans to switch TV providers in the next six months, and found 9% saying they’ll make a change – the same as the previous three surveys.

Do you plan on switching cable, satellite or fiber-optic TV service providers in the next six months?

Current Survey Jun ‘13 / Previous
Survey Mar ‘13 / Previous
Survey Dec ‘12 / Previous
Survey
Sep ’12 / Previous
Survey
Jun ‘12
Yes / 9% / 9% / 9% / 9% / 10%
No / 73% / 73% / 72% / 73% / 73%
Don’t Know / 18% / 17% / 19% / 18% / 17%

Bright House now leads in customer loyalty – with only 6% of their subscribers saying they’ll switch providers in the next six months.