JD Power: Premium TV subs are more loyal

Michelle Clancy | 16-10-2012

Premium television package subscribers are more loyal and more likely to purchase additional products from their television provider than are subscribers with basic and expanded basic programming packages, according to the J.D. Power and Associates 2012 U.S. Residential Television Service Provider Satisfaction Study.

The study finds that 31% of premium package subscribers say they "definitely will not" switch providers, compared with subscribers of expanded basic (22%) and basic (20%) programming packages. Additionally, premium package subscribers serve as brand advocates more often, as 26% say they "definitely will" recommend their provider, compared with subscribers of expanded basic (16%) and basic (14%) packages.

Overall customer satisfaction with residential television service directly correlates with a household's programming package. Premium package subscribers are most satisfied with their television service, reflected in an index score of 716 (on a 1,000-point scale). Satisfaction is significantly lower among expanded basic subscribers (677) and basic subscribers (656). Although having the highest satisfaction, premium package subscribers account for the fewest number of subscribers (13%), compared with expanded basic (38%) and basic (49%) subscribers.

"After several years of declining subscription to premium programming packages associated with the economic downturn and the introduction of attractive over-the-top alternatives, it appears premium programming is making a comeback," said Frank Perazzini, director of telecommunications at J.D. Power and Associates. "Premium package subscribers have proven to be better brand advocates. Television providers catering to these high-value subscribers with video-on-demand and mobile applications will be well positioned to keep these customers and grow their relationship, moving forward."

Although premium packages cost more than expanded basic and basic programming, satisfaction with cost of service is higher among premium package subscribers (633), than among expanded basic (588) and basic (567) subscribers. In fact, premium package subscribers are more willing to pay for even more video content, as 42 percent of these customers say they are likely to order video-on-demand programs in the next six months, which is significantly higher than among both expanded basic and basic cable subscribers (37% and 27%, respectively).

The study measures customer satisfaction with cable, satellite and Internet protocol (IPTV) television providers in four regional segments: North Central, East, West and South. Six factors are measured to determine overall customer satisfaction: programming; performance and reliability; customer service; cost of service; billing; and offerings and promotions.

In the East region, Verizon FiOS ranks highest with a score of 728, followed by DISH Network (719) and DirecTV (711). In the South, DirecTV ranks highest (729), followed closely by AT&T U-verse with a score of 728. Verizon FiOS ranks third with a score of 714. In the North-Central region, WOW! (a.k.a. Wide Open West) ranks highest, with a score of 711, closely followed by AT&T U-verse (710) and DIRECTV (705). In the West, DISH Network ranks highest with a score of 713. AT&T U-verse and DirecTV follow in a tie with a score of 708 each.