• by Jack Loechner , Staff Writer @mp_research, September 29, 2005

According to the J.D. Power and Associates 2005 Residential Cable/Satellite TV Satisfaction Study, satellite TV service continues to erode cable's market share, increasing every year for the past 10 years and making its most significant leap this year. Currently, 27 percent of U.S. households subscribe only to satellite serviceup from 19 percent in 2004 and 12 percent in 2000. Sixty percent of households subscribe only to cable servicedown from 62 percent in 2004 and 66 percent in 2000.

"Although satellite providers continue to gain market share, overall customer satisfaction among satellite subscribers has declined while satisfaction among cable subscribers is up," said Steve Kirkeby, senior director of telecommunication research for J.D. Power and Associates. "(For) satellite providers... customer satisfaction is a critical area where they can't afford to lose ground."

The average amount consumers spend monthly on satellite TV service continues to be less than cable service. Satellite subscribers report paying an average of $57.72 per month for service, while cable subscribers pay an average of $58.51 a month.2

Although both satellite and cable service providers have been actively promoting digital video recorders (DVR), only 12 percent of customers currently own a DVR system. Current usage of DVRs through cable companies (35% of DVR owners) outpaces usage through satellite companies (23%). Another 22 percent of DVR owners use systems by TiVo. The study also finds that 21 percent of consumers report ordering a video on demand (VOD) programa decline of 1 percent compared to the prior year.

"Clearly the industry needs to continue to educate subscribers about VOD," said Kirkeby. "One of the most compelling findings in the study is the significant increase in overall satisfaction exhibited by users of VOD services compared to non-usersnearly 30 index points.... In some instances, cable companies are offering free VOD programming that their customers are apparently unaware of."

For more information about this study, go here.