Customer Satisfaction: Bundling Bites Back?

The ephemeral winds of "customer satisfaction" are blowing through MVPD land again with mixed results for everyone.

Statistically, satisfaction with pay TV services is unchanged across 1Q11 (with an American Customer Satisfaction Index (ASCI) score of 66).  Note the ACSI rankers, "Quality, especially from fiber-optic and satellite, has improved in recent years, but higher fees are significantly dampening customer satisfaction, more so than in other industries."

That said, Verizon FiOS gets first place with a score of 72 (down 1%); DIRECTV takes No. 2 at 69 (+1%); DISH fell 6% to 67 while AT&T U-verse dropped 6% to 68 amid complaints about HD picture quality.  Among the cable guys Cox again led the pack at an unchanged 67; tied for bottom place were Comcast (-3%), Time Warner Cable (-3%) and Charter (-2%) all with ACSI scores of 59.

The vaunted "bundle" may be hurting many MVPDs, notes ACSI founder Claes Fornell.  "“Bundling of services such as phone and Internet access may have been both a blessing and a curse for the industry,” he says. “A couple of years ago, a variety of bundling promotions boosted what people saw as value for money; but now, as many of these promotions have ended, subscribers with bundled services are becoming less satisfied and more concerned about price.”

Overall, nobody in MVPD land had much to brag about as all trailed the national average of 75.6% ... leaving us to wonder about the various chest-beating press releases.•

Etc: Netflix's Big Broadband Bite – NBCU's Retrans Offer – VZ Sues FCC

Analyze This:  Sandvine's latest internet trend report highlights Netflix as the biggest bandwidth hog, accounting for 29.7% of peak downstream traffic.  Overall, real-time entertainment applications consume 49.5% of peak aggregate traffic and, Sandvine notes, that category will represent 55-60% by years end.  Find the release here. --- According to the International Telecommunication Union (ITU),  consumers and businesses globally are paying on average more than 50% less for high-speed Internet connections than they were two years ago.  Prices in developed countries are driving the decrease while charges in developing countries often remain beyond the reach of most citizens.  For the release, go here.

Strategies:  Time Warner Cable has thrown money into the pot for BlackArrow, a provider of VOD ad solutions, bringing the investment total to $20M - $27M.  Other investors include Cisco, Comcast Interactive Capital, Intel Capital, Mayfield Fund, Motorola Mobility, NDS and Polaris Venture Partners.

Infrastructure & Launches:  Bend Broadband is planning a new $16M server farm with hopes of capturing business from companies who want to move more ops offline.  (First reported in Oregonlive.com.) --- Cox has launched its "Unbelievably Fair" mobile phone and high-speed Internet service across the state of Rhode Island and communities it serves in Connecticut and Cleveland, Ohio. Cox Wireless is also available in Hampton Roads, Va., Omaha, Neb., Orange County, Calif. and Oklahoma City and Tulsa, Okla. --- AT&T U-verse is rolling out new features allowing Total Home DVR customers to pause/rewind live TV from any TV in their home.  The no-cost service is currently available in Mobile AL and Grand Rapids MI; remaining markets will be added across the next few months. 

Heads Up:  Bad news on economic and potential new subs fronts:  U.S. housing starts fell 10.6% in April. --- The Technology Policy Institute will host a discussion on "Spectrum Incentive Auctions: the Nuts, Bolts and Economics," on May 23 in DC. Info here.

SkyREPORT:  SKY WEB has become a part of New Jersey-based Distinct Holdings, the parent company to Diversified Systems and Diversified Media Group, thus combining SKY WEB's digital satellite expertise with the Diversified companies' broadcast and IP engineering experience. 
 
Deals & Partnerships:  DIRECTV has selected Amdocs Mediation software to support its growing number of partnerships with service providers that bundle DIRECTV video services into their offerings. --- Zodiac Interactive will partner with Videotron to introduce a new, interactive multi-platform games portfolio.  

In the Courts:  The U.S. District Court for the Eastern District of Virginia has invalidated all claims by Verizon on key patents which were included in a suit against ActiveVideo and (for one of the patents) Cablevision. --- Verizon is suing the FCC over data roaming rules.

Programming;  GolTV has reached a multi-year agreement with the Union of European Football Associations (UEFA) for the exclusive media rights to UEFA’s Youth, Women and Futbal competitions in Canada and USA. – DISH has added two specialty channels to facilitate disaster donations.  "Donate Storm Relief" and "Donate to Japan Here" will be available through July 31

Advertising;  Notes ad guru Jack Myers, forget the broadcast bells and whistles of yesteryear, "Today, networks, advertisers, and agency middle-men are more focused on the traditional role of network advertising as a vehicle for reaching large audiences with 30-second commercial messages in quality content."

People:  Cox EVP Mae Douglas will receive the Friend of NAMIC Award at the group's breakfast awards on Thursday June 16 during the Cable Show.

Retrans & Renewals:  NBCU says it will be happy to handle retrans negotiations on behalf of its affiliates ... on a voluntary basis.  

Online:  Blip.tv has launched a new "consumer facing" website.  The web series network is on pace to reach one billion views per quarter.  

Get tomorrow's headlines today with The Evening BRIDGE ... every weekday, after the Bell.•

Letter to the Editor: On Programming Packages

A reader offers a suggestion for programming packages ... and perhaps a way to stronger customer satisfaction.

I fixed my first TV before man walked on the moon.  I have been a satellite installer since 1990.  I have my own place of business.  I listen to my customers. In truth, every customer is my Boss.   A philosophy that I have used for my business model all these years.
 
I have lost satellite commissions and equipment because (of problems with packages and pricing.) 
 
I understand the reason for the packaging structure that the cable/satellite industry offers.  Those packages target a family with two adults and three plus kids.  From listening to these families, I have found them polarized into five groups.
 
1)      Everything.
2)      Locals, Movies, No Sports.
3)      Locals, Sports, No Movies.
4)      Locals, Commercialized programming, No Movies, No Sports.
5)      Locals only.
 
Locals:  The strongest desire is for locals. Yet in my area, there is a two network difference in the local selection between satellites and local area cable companies. In my county, most customers desire the cable selection of locals. I have actually had one satellite customer change his address number by one digital in order to get the locals that desired.  The road they live on is the counties and DMAs dividing line.
 
Movies, No Sports/Sports, No Movies:  This is the most hated division (in packaging).  When customers communicate to me what they want in programming, they are very vocal in their hate.
 
So from listening all these years to my Boss, this is how I hear them.
 
Packages Structure:
 
1)      Everything with different sizes of packaging.
2)      Movies only with different sizes of packaging.
3)      Sports only with different sizes of packaging.
4)      Locals DMA with no DMA limits including Superstations.
5)      Commercialized programming with different sizes of packaging.
 
This is not a restrictive format to the fact that the customer could not purchase a Sports package with a Movie package, etc.
 
Netflix listened.
 
Howard
Howard's VCR/TV Service