subject: Cable Tv Loses Customers To Competition And Poor Customer Service [print this page] Year after year for the last several decades we have complained about cable television service. When we called them for service we were told they would be there next week somewhere between 8 am and 7pm. That meant we'd have to take the day off of work to sit in the house and wait for the cable guy to come because if we were not there when they arrived we'd have to reschedule and wait another week. That's if they showed up at all. Cable was King. Cable television companies felt no need to worry. Customers had no choice. Until now.
Suddenly the local telephone company is selling a competitive service. It is called IPTV. AT&T sells Uverse and Verizon sells FiOS. These services are such good quality and offer so much more in features that they are now winning customers away from the cable television industry.
Reportedly 5 million households have cancelled their cable television service and given their business to the phone company or satellite television. Cable television customers dropped to around 63 million from 68 million, between 2006 and 2009. That is a turn of events that has the cable television companies scrambling for a fix.
The last several years we have watched the telecommunications industry completely remake itself. We used to do business with both companies, because we had no choice. However an increasing number of customers are getting a choice.
First the cable television companies started offering phone service over the Internet and they were winning customers from the phone companies. Now the reverse is happening as local phone companies are winning business from the cable television companies.
Isn't competition a beautiful thing?
Competition is good for everyone, customers and companies. It improves the quality. It lowers the price. It increases innovation. Customers start to love what the company does instead of complain about it. Investors love this in the marketplace. It is healthy.
We have seen the cable television companies win customers from phone companies a few years ago. Now we are seeing the local phone companies winning customers of their own from the cable TV companies.
This was expected. I have been saying for the last several years that 10 to 20 % of the customers on each end will quickly give their business to one side or the other. The battle comes when the vast middle is fought over.
So winning customers is a very interesting situation, but it was expected. Over the next year I think we will start to see advertising and marketing change. This is a very good thing for customers.
Just look at what we are seeing so far. The cable television industry knows they have a problem. They are advertising their new responsiveness to the customer. They say they will be there quicker when you need them, and give you a few hour window, in advance. That is a complete turnaround for the cable television industry.
The reason is competition. If you can leave and go to the competitor if you are unhappy, suddenly the company takes very good care of you. AT&T, Verizon, Qwest, DirecTV and Dish Network are the competitors who are changing the industry and forcing the cable television companies to improve.
In the 1990's the TV show Seinfeld, Kramer tried to get back at the cable company by telling them he'd be there between 9am and 1pm then he didn't show.
The same thing happened with local phone companies back in the 1970's. Remember Lily Tomlin from the TV show Laugh In? One ringy dingy, two ringy dingies, oh goodness gracious this is Ernestine the operator from the local phone company, to whom am I speaking... honk, honk.
These were some of the funniest skits on television because we could all relate to the lousy service we got from the phone company.
Well today the phone companies give excellent service. Why? Competition. They started competing with the long distance giants in the 90's, and they eventually won. SBC and Verizon acquired the long distance giants AT&T and MCI in the early 2000's. Now they are larger, more successful and competing with a new threat, the cable TV companies.
At the same time cable television customer satisfaction ratings have been among the lowest of any industry followed. The American Customer Satisfaction Index said the four largest cable TV operators averaged only 59 (from 1 to 100) since 2004. That is worse than other industries that we also complain about.
So this is nothing new. We have learned competition is a beautiful thing. Suddenly the marketplace has changed. Suddenly the customer is first, not the company like it has always been.
The cable television companies like Comcast, Time Warner, Cox, Charter Communications, Cablevision and others are learning the painful lessons the phone companies learned 20 years ago. Isn't it great to finally get a caring voice on the other end when you call your cable television company for service?
This is only the beginning. The cable television industry has a lot to learn. They have to retrain their workers. They have to re-write their mission statements. They have to recreate themselves. It will take some time, but at least they are now headed in the right direction for customer, investors and workers.
