Cable customer service not improving fast enough to keep up with competition, analyst says

Cable customer service not improving fast enough to keep up with competition, analyst says


June 16, 2016 | By Daniel Frankel

With a Senate subcommittee panel set to grill pay-TV executives on customer services and billing practices on June 23, analysts say recent improvements in these areas by top operators like Comcast (NASDAQ: CMCSA) do not go far enough.

“While many of these cable providers will make the argument that their customer services have improved, it is not enough to keep up with today’s consumer demands and certainly not enough to keep up with their increasingly customer-obsessed competitors. This investigation is going to be a reality check for them,” said Forrester analyst Rick Parrish in comments released today.

Meanwhile, Parrish’s colleague, Harley Manning, thinks questions about pay-TV customer service are not as relevant, given that competition from OTT service providers is forcing them to change.

“Now, with more services like HBO GO and Netflix, there is an economic incentive for the major providers to act,” Manning said. “Due to these existential threats to the core business models of these companies in question, they need to think more like the cultures of Southwest and USAA, not the slightly better telco guys in the next zip code.”

A bipartisan Senate panel is getting set to grill cable, satellite and telco TV execs on their billing practices and overall customer service.

The Senate Permanent Subcommittee on Investigations panel is led by Sen. Rob Portman (R-Ohio). But its top Democrat is Sen. Claire McCaskill (D-Mo.), a longtime critic of pay-TV billing practices.

For its part, Comcast has been most aggressive in terms of making customer service improvements and recently saw marginal improvements on pay-TV customer satisfaction surveys published by the American Customer Satisfaction Index and Consumer Reports. However, both surveys reported generally low marks for the pay-TV sector.

“As former market-by-market monopolies, cable companies didn’t have much economic incentive to focus on customer experience,” Manning said. “The bar was set really low by the few market players so there was little competition — and where there was competition they weren’t exactly shooting for the stars. In my opinion, this would have been the time for the Senate to act on this case.”

“It is a very compelling case, since Congress had a hand in creating the current cable market landscape — they are now investigating,” Parrish added.

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