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Cable Subs See Low Value For Their Money

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Cable providers could find customers defecting for other services, or possibly even cutting the cord if they don’t find ways to provide more value to their subscribers, according to a new survey from Strategy Analytics. As many as two-thirds of cable subscribers said they would switch providers if they could find cheaper services elsewhere, which could be bad news for Comcast (s CMCSA), Time Warner Cable (s TWC), Cablevision and others.

At the heart of customer dissatisfaction is the fact that most don’t believe they are getting a lot of value for the money they spend on cable. According to Strategy Analytics, less than 22 percent of pay TV subscribers said their service exceeded or greatly exceeded their expectations of value for money. With the growth of online video services like Hulu and Netflix (s NFLX), Ben Piper, director of the Strategy Analytics Multiplay Market Dynamics service (MMD), sayd cable subscribers see less value in paying for traditional cable subscriptions.

According to the survey, more than two-thirds of cable subscribers stated they would switch providers if offered a 20 percent discount over their existing pay TV bills. IPTV providers fared better, with half as many saying they would churn if offered a lower-priced service. That is consistent with other findings of the survey; for instance, customer satisfaction among telco and IPTV customers was about 95 percent, compared to 67 percent for cable.

Cable companies have made some advancements in the customer service portion of the survey; last year, in a similar survey, customer service was the weak component for cable providers. However, cable providers are now falling behind in articulating added value on the innovation front when compared to satellite and IPTV providers.

While the study asked specifically if pay TV customers would consider switching providers, Piper sayd that dissatisfaction among cable subscribers could also lead to cord cutting, if they continued to show dissatisfaction with the services their service providers offered.

There is some hope for cable companies, however; particularly if they have managed to get their customers to sign up for bundled services. Customers that had signed up for bundles were much more likely to be satisfied with the services that they were being offered, and 19 percent less likely to leave their cable company if an alternative service provider offered similar services at a 10 percent discount.