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Major surge in
penetration of satellite
Nearing a third of households, up from 19 percent
By Kevin Downey
Cable television providers in the past year have
been aggressively working to improve customer satisfaction, in part
to stem subscriber erosion to satellite services like DirecTV. But
so far with little luck.
Satellite penetration is now at 27 percent of
households, up dramatically from 19
percent just a year ago and 12 percent five years ago. Satellite
penetration is approaching half of cable's.
That is
according to a study on customer satisfaction among satellite and
cable subscribers from J. D. Power & Associates, the research
company based in Westlake Village, Calif.
While cable services were effective in improving
customer satisfaction, penetration fell to 60 percent, from 62
percent last year and 66 percent in 2000.
Steve Kirkeby, senior director of
telecommunication research at J. D. Power, attributes satellite’s
growth to a few factors, including first-time multi-channel
subscribers choosing satellite, notably in rural areas where cable
TV isn’t available. But there's also the rise of partnerships with telephone
companies for voice and internet services, sometimes with only one
bill.
“The cable market share of households has been
relatively flat, fluctuating 1 or 2 percent over the last three
years,” says Kirkeby.
“It is satellite that is picking up new
subscribers, folks who’ve never had pay TV before. Their growth
isn’t necessarily coming from cable.”
Cable TV is also unlikely to lose a significant
number of subscribers to satellite over the next few years because
cable services have largely erased some of the perceived advantages
of satellite.
The average cost for satellite is $57.72 per
month, for example, compared to $58.51 for cable.
These figures are based on responses to the J. D.
Power study. The research company conducted a survey with nearly
11,600 cable and satellite subscribers.
Moreover, while cable TV for years has been
considered a barrier to competition--most neighborhoods only have
one cable service-- Kirkeby says that is changing.
“As more and more people get on satellite,
[satellite] is now being perceived as just another competitor that
needs to prove its way,” he says. “And cable is less often
perceived as the one that has been in the way of competition.”
Cable TV also has improved customer satisfaction
by bundling multiple services, specifically cable TV, telephone and
high-speed internet, offering subscribers the convenience of paying
one bill and contacting a single company when problems arise.
“[Cable] realized bundling is what a customer
wants, so they’ve really been promoting that in a large way,”
says Kirkeby. “Cablevision and Cox always did that. But now Time
Warner is jumping into the fray, and a lot of smaller cable companies
are also offering triple play, which is what they call it.”
Customer satisfaction for cable TV went up in the
past year from 639 to 643 on a scale where 1,000 is perfect.
Customer satisfaction is based on a number of measures, including
cost of service, offerings and customer service.
At the same time, customer satisfaction with
satellite services dipped from 723 to 712.
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Aug. 22, 2005
©
2005
Media Life
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Kevin Downey is a staff writer for
Media Life.
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