Higher Overall Satisfaction with Alternative Video Services Motivates Customers to Cut the Cord, J.D. Power Finds
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1 Higher Overall Satisfaction with Alternative Video Services Motivates Customers to Cut the Cord, J.D. Power Finds AT&T and Verizon Receive Multiple Awards across Product Segments, Regions NEW YORK: 29 Sept Overall satisfaction with alternative video services such as streaming and transactional-based OTT (over the top) offerings is considerably higher than it is with traditional pay television service, spurring an increase in cord-cutting from 2015, according to three J.D. Power studies released today. The related studies are the J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM ; the J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM ; and the J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study. SM The annual wireline studies, now in their 15th year, evaluate residential customers experiences with TV, internet and phone services in four geographical regions: East, South, North Central and West. The ISP and telephone studies measure customer satisfaction across five factors: network performance and reliability; cost of service; billing; communication; and customer service. The TV study measures satisfaction in those same five factors plus a sixth: programming. Satisfaction is calculated on a 1,000-point scale. The TV study finds that, compared with pay TV service providers, satisfaction is significantly higher with paid streaming video services like Netflix, Amazon and Hulu; skinny bundle offerings like SlingTV and PlayStation Vue; and programming apps like HBO Go. For example, customers rate their primary alternative video service higher than their TV service for the overall experience (7.92 vs. 7.18, respectively, on a 10-point scale), which is largely driven by much higher ratings for the overall cost of service experience (7.99 vs. 6.42). Customers also rate their primary alternative video service higher than their TV service for the overall performance and reliability (7.98 vs. 7.82), programming (7.87 vs. 7.76) and billing (8.04 vs. 7.54) experiences. Subsequently, with relatively low prices and increasing rates of adoption, alternative video services are helping drive the cord-cutting trend. Nearly two-thirds (63%) of customers have used an alternative video service in the previous year, up from 58% in Additionally, 73% of customers who plan to cut the cord on TV service in the next year indicate they will use an alternative video service. This finding partly reflects age demographics since younger customers are more likely to use alternative video services than older customers, and younger customers are more satisfied with alternative TV service than older customers, said Kirk Parsons, senior director and technology, media & telecom practice leader at J.D. Power. Despite their higher satisfaction, customers who have used an alternative video service in the previous year are much more likely than those who haven t used one 14% vs. 4% to cut the cord on TV in the next year.
2 However, customers who cut the cord on TV are not necessarily lost for TV providers, and increasing their satisfaction raises the likelihood that they will reactivate TV service or upgrade their internet service in the future. Among customers who plan to drop TV service during the next 12 months, 44% say they expect to reactivate it during certain times of year. Overall satisfaction among customers in this group is 845, compared with 575 among those who do not plan to reactivate TV service and 561 among those who don t know if they will reactivate it. Key Study Findings Residential Television Service Provider Satisfaction Study AT&T U-verse/DIRECTV ranks highest in TV customer satisfaction in the East (782) and South (764) regions; Verizon FiOS (776) ranks highest in the West region; and DISH Network (747) ranks highest in the North Central region. Among customers who switched providers in the previous 12 months, the most commonly cited reasons for switching are cost was too high (25%); moved locations/previous provider not available at new location (24%); competitor offered a better deal (17%); and customer service was poor (10%). Residential Internet Service Provider Satisfaction Study Verizon ranks highest in ISP customer satisfaction in the East (735), South (755) and West (755) regions; AT&T (717) ranks highest in the North Central region. Slightly more than one-third (34%) of customers purchase premium speed internet. This compares to 37% in 2015 and 27% in Performance and reliability satisfaction among customers with premium speed internet is 763, while satisfaction among those without premium speed internet is 694. Over a typical three-month period, 42% of customers experienced a website connection error or failure to load (vs. 45% in 2015); 48% experienced a website that was excessively slow to load (vs. 51%); and 36% experienced a general service outage (vs. 37%). The incidence of customers experiencing an connection error 28% is unchanged from Residential Telephone Service Provider Satisfaction Study Cincinnati Bell ranks highest for the first time in telephone customer satisfaction in the North Central region (765); Verizon ranks highest in the East (757), South (766) and West (770) regions. Nearly half (46%) of highly satisfied residential telephone customers (overall satisfaction scores of 900 or higher) say they definitely will not switch providers in the next 12 months, compared with only 12% of dissatisfied customers (scores below 550) who say the same. The 2016 U.S. wireline studies are based on responses from 31,072 customers nationwide who evaluated their cable/satellite TV, high-speed internet and telephone service providers. The studies were fielded in four waves: November 2015, February 2016, April 2016 and July For more information about these three J.D. Power studies, visit: See the online press release at Media Relations Contact Geno Effler; Costa Mesa, Calif.; ; media.relations@jdpa.com
3 About J.D. Power and Advertising/Promotional Rules # # # Note: Thirteen charts follow. (Page 2 of 3)
4 2016 U.S. Residential Television Service Provider Satisfaction Study SM East Region AT&T U-verse/DIRECTV 782 DISH Network 763 Verizon FiOS 743 East Average 717 Optimum (Cablevision) Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM
5 2016 U.S. Residential Television Service Provider Satisfaction Study SM North Central Region DISH Network 747 AT&T U-verse/DIRECTV 741 North Central Average 715 WOW!(Wide Open West) Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM (Page 2 of 3)
6 2016 U.S. Residential Television Service Provider Satisfaction Study SM South Region AT&T U-verse/DIRECTV 764 Verizon FiOS 761 DISH Network 759 South Average 737 Bright House Networks Suddenlink 696 Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM
7 2016 U.S. Residential Television Service Provider Satisfaction Study SM West Region Verizon FiOS 776 AT&T U-verse/DIRECTV 755 DISH Network 746 West Average CenturyLink Mediacom Communications 647 Source: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM (Page 2 of 3)
8 2016 U.S. Residential Internet Service Provider Satisfaction Study SM East Region Verizon 735 Optimum (Cablevision) East Average Frontier Communications 662 Source: J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM
9 2016 U.S. Residential Internet Service Provider Satisfaction Study SM North Central Region AT&T 717 WOW!(Wide Open West) North Central Average Frontier Communications 657 CenturyLink 651 Note: Verizon is included in the study and regional averages but not ranked in the North Central region due to insufficient sample Source: J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM (Page 2 of 3)
10 2016 U.S. Residential Internet Service Provider Satisfaction Study SM South Region Verizon 755 AT&T 736 Bright House Networks South Average Suddenlink CenturyLink 680 Windstream 637 Source: J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM
11 2016 U.S. Residential Internet Service Provider Satisfaction Study SM West Region Verizon 755 AT&T West Average CenturyLink 661 Frontier Communications 648 Mediacom Communications 634 Source: J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM (Page 2 of 3)
12 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM East Region Verizon Optimum (Cablevision) 732 East Average 730 Frontier Communications Source: J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM
13 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM North Central Region Cincinnati Bell 765 AT&T 752 WOW! (Wide Open West) 741 North Central Average Frontier Communications 705 CenturyLink Note: Verizon is included in the study and regional averages but not ranked in the North Central region due to insufficient sample Source: J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM (Page 2 of 3)
14 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM South Region Verizon 766 AT&T 763 Bright House Networks South Average 749 CenturyLink Windstream 690 Source: J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM
15 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM West Region Verizon 770 AT&T 760 West Average CenturyLink Frontier Communications 682 Source: J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM (Page 2 of 3)
16 2016 U.S. Residential Television Service Provider Satisfaction Study SM ; J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM ; J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM Award-Eligible Telecom Providers Included in the Studies Company Name CEO Name Company Location AT&T/AT&T U-verse/DIRECTV Randall Stephenson Dallas, Texas Bright House Networks Thomas Rutledge Stamford, Conn. CenturyLink Glen Post III Monroe, La. Thomas Rutledge Stamford, Conn. Cincinnati Bell Theodore Torbeck Cincinnati, Ohio John Dyer Atlanta, Ga. DISH Network Charles Ergen Englewood, Colo. Frontier Communications Daniel McCarthy Norwalk, Conn. Mediacom Communications Rocco Commisso Mediacom Park, N.Y. Optimum Dexter Goei Bethpage, N.Y. Suddenlink Dexter Goei Bethpage, N.Y. Thomas Rutledge Stamford, Conn. Verizon/Verizon FiOS Lowell McAdam New York, N.Y. Windstream Anthony Thomas Little Rock, Ark. WOW! Steven Cochran Englewood, Colo. Brian Roberts Philadelphia, Pa. Sources: J.D. Power 2016 U.S. Residential Television Service Provider Satisfaction Study SM ; J.D. Power 2016 U.S. Residential Internet Service Provider Satisfaction Study SM ; J.D. Power 2016 U.S. Residential Telephone Service Provider Satisfaction Study SM
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