• by Jack Loechner , Staff Writer @mp_research, September 10, 2002

Cutting the Cord For the Dish

About 82 percent of U.S. households have some type of cable or satellite TV service, according to the recently released J.D. Power and Associates 2002 Residential Cable/Satellite TV Customer Satisfaction Study and U.S. government data.

"While the study shows the average expenditure for both information/entertainment services is now nearly equal, more consumers are electing to switch services to satellite TV providers," said Steve Kirkeby, senior director of telecommunications for J.D. Power and Associates.

Satellite-only subscription continues to rise, increasing from 14 percent of total households in 2001 to 16 percent in 2002. Satellite subscription in 1996 was only 5 percent. Cable-only subscription continues a slow decline from 65 percent in 2001 to 63 percent in 2002.

"In overall customer satisfaction performance, DirecTV ranks highest among the 14 major providers of cable/satellite TV services nationwide-18 index points higher than the cable TV service average," Kirkeby said. The six factors driving overall customer satisfaction include: cost of service; credibility/billing; program offerings; equipment and service capabilities; customer service; and reception quality.

The cable industry's movement toward digital subscription remains strong, growing from 27 percent in 2001 to 32 percent in 2002. "Last year, we saw a 14 point rise in overall satisfaction due to conversion from analog service to digital," said Kirkeby. "This year, overall satisfaction only rises by half as much."

While channel line ups have improved for cable subscribers, average monthly cable expenditure is also rising, according to study respondents. Average monthly cable expenditure is $47.08, bringing it closer to the average monthly satellite expenditure of $50.71.