Americans staying home are happier with their Internet and subscription TV service, according to the ACSI Telecommunications Report 2019-2020 from The American Customer Satisfaction Index (ACSI). Video streaming maintains its status leading customer satisfaction
Covid-19 has dramatically changed the way Americans work and how they spend their leisure time. With stay-at-home and work-from-home becoming a new normal for many American households, the services offered by major telcos are more critical than ever before. The global pandemic has put a spotlight on both the need for reliable high-speed Internet service and the craving for more in-home entertainment options.
This report covers five telecommunications industries—subscription TV service, Internet Service Providers (ISPs), fixed-line telephone service, video-on-demand service, and video streaming service. New to the survey this year for the ISP industry.
According to ACSI results, many telcos are stepping up their game, bringing better service to their customers compared to a year ago. Among the five telecom categories, three have significantly improved customer satisfaction: subscription TV service, ISPs, and video-on-demand service. Within these three industries, 65 per cent of the measured companies show ACSI gains. Among the gainers, Comcast’s Xfinity is the most improved telecom company this year.
While the full impact of the Covid-19 crisis is yet unknown, both ISPs and subscription TV now receive their first customer satisfaction boost in four years. Nevertheless, they continue to rank at the bottom among 46 industries, along with video-on-demand and fixed-line telephone. Only video streaming maintains a level of customer satisfaction that exceeds the average for all ACSI industries (75.4 as of the first quarter of 2020). Video streaming is also home to the service that posts the highest customer satisfaction across all five categories: ACSI newcomer Disney+.
Meanwhile, cord-cutting continues to be a major challenge for traditional subscription TV companies. In fact, a growing number of consumers report never having paid for a subscription TV service at all. But this cord-never group, which tends toward a younger demographic, may be losing out when it comes to satisfaction.
ACSI data show that viewers with a mix of services—either cord-stackers (those having both pay-TV and video streaming services without reducing their TV spending) or cord-shavers (those adding streaming but opting for less expensive TV service)—are the most satisfied (76). This compares to ACSI scores of 73 for the cord-never group and 74 for the cord-cutter group (those who eliminated pay-TV completely in favour of streaming).
Customer satisfaction with subscription television service rises 3.2 per cent to an ACSI score of 64. According to ACSI data, pay-TV customers overall are happier with the value offered by their service provider compared to a year ago. Despite the improvement, subscription TV remains at the very bottom among 46 ACSI industries.
In 2019, cord-cutting accelerated, with major cable and satellite TV operators collectively losing about 5.8 million subscribers. Many of these viewers are jumping over to more satisfying over-the-top (OTT) video streaming services, including established players such as Netflix and Hulu, and newer services such as Disney+. Customer satisfaction with video streaming remains at the much higher level of 76—a score that pay-TV has never come close to attaining.
Amid this highly competitive environment, the satisfaction improvement for subscription TV is widespread, with nine of 11 major companies showing ACSI gains year over year. The most staggering improvement, however, goes to Comcast’s Xfinity—up 11 per cent for its subscription TV service. Moreover, Xfinity’s customer satisfaction is better this year in the other telecom categories as well.
As in past years, two fibre providers top the rankings. Fios by Verizon Communications gains 3 per cent to 70 and ties with AT&T’s U-verse TV (+1 per cent). Since 2015, Fios and U-verse have held the top two positions in the industry, and this year the gap to the next competitor opens up to 5 points. According to customers, Fios is a leader across many customer experience benchmarks, and its picture quality (HD and standard) rates best in class. Meanwhile, AT&T is shifting its focus to the recently launched AT&T TV, its new Internet-based pay-TV service. The company is no longer accepting new online subscribers for U-verse TV and has been merging U-verse’s social media into channels for its other services.
The second tier in the industry continues to be the territory of satellite providers, but their customer satisfaction advantage over the top cable companies has all but evaporated. DISH Network drops 3 per cent to 65 while AT&T’s DirecTV falls by the same amount to 64. ACSI data show that customer service has deteriorated significantly for DISH Network in terms of both staff courtesy and service speed. For DirecTV, the satisfaction loss comes at a time when it has been rapidly shedding subscribers.
While the remaining companies all score below the industry average of 64, a gap of 7 points separates the best from the worst. Coming in at 63, Optimum (Altice USA) gains 3 per cent to tie with the greatly-improved Xfinity (+11 per cent). According to subscribers, Xfinity is enhancing its service across much of the customer experience. Among all large pay-TV operators, Xfinity shows the biggest gain in customer perceptions of value.
Customer satisfaction with the video-on-demand (VoD) services of major cable, satellite, and fibre-optic subscription TV providers is up 1.5 per cent to an ACSI score of 68. The gain reverses a loss from one year ago, and unlike the subscription TV or ISP categories, the improvement here is not widespread. Among nine companies, only three see satisfaction improve year over year. As OTT streaming services proliferate, the VoD services that are part of the traditional pay-TV business model are generally being left behind for customer satisfaction.
As more viewers drop their traditional pay-TV bundles, major companies such as AT&T’s WarnerMedia and Comcast’s NBCUniversal are launching OTT streaming services that will likely debut in the Index next year. Along with the new HBO Max and Peacock, short-form mobile video platform Quibi has thrown its hat into the streaming ring. All three services launched after the ACSI interview period ended.
With more and more Americans stuck at home, video streaming overall has the lock on customer satisfaction among telecom industries. With a stable ACSI score of 76, video streaming outpaces subscription TV by a yawning gap of 12 points. This year, Disney+ sets the bar even higher, debuting in the ACSI with the top score across all five telecom categories.
When it comes to entertainment, Disney is hard to beat and Disney+ proves just that, with a first-time ACSI score of 80. This puts the service at the top of video streaming for customer satisfaction, ahead of former leader Netflix—the company that jump-started the industry. According to viewers, Disney+ is a standout across much of the customer experience and its original content rates best in class.
As Netflix hands the customer satisfaction crown over to Disney+, its ACSI score slips 1 per cent to 78—still good enough to hold second place.
Hulu, now controlled by Disney, closes in on Netflix this year, up 1 per cent to 77. Likewise, the Apple TV App (formerly Apple iTunes) is up 1 per cent to 77. Viewers appreciate the number of TV shows that Hulu offers, and it surpasses nearly every streaming service on this measure.
The group of smaller streaming services shows strong improvement this year, rising 6 per cent to match the industry average of 76. Amazon Prime Video, available to Prime members at no additional cost, stays put at 76 and ties with Microsoft Store (-1 per cent).
Four services are just below the industry average with scores of 75. Among this group, Starz has improved customer satisfaction significantly, up 4 per cent year over year. CBS All Access, Amazon’s Twitch, and Google’s YouTube TV are all unchanged. CBS All Access, dedicated to CBS content, offers on-demand and live TV. Subscribers are highly pleased with the service’s availability of current season’s TV shows where it is deemed best in class.
Apple TV+ debuts in the ACSI with a below-average score of 74, tying both Google Play (-1 per cent) and AT&T’s HBO (unchanged). Like Disney+, Apple TV+ launched in November. Its viewers, however, appear to be far less impressed than Disney+ viewers. Apple TV+ offers a relatively small slate of new and original programming only.
On the low end of the industry, AT&T TV NOW gains 4 per cent to 72. Moving in the opposite direction, Walmart’s Vudu drops 4 per cent to 72. For Vudu, customers find that much of their experience has worsened this year.
Staying close to the bottom, CBS’s Showtime is unchanged at 71. DISH Network’s Sling TV loses ground, falling 4 per cent to match Showtime. In the fourth quarter of 2019, Sling TV lost subscribers for the first time since its 2015 launch. Sony’s Crackle continues to be the least-satisfying streaming service, unmoved at an ACSI score of 68.
According to viewers, the video streaming industry overall does a much better job than the VoD services of traditional pay-TV operators. Overall reliability and performance for video streaming is stable at 79, far ahead of VoD service (72). Likewise, programming guides and menus are much easier to use (79 versus 74 for VoD). The one area where VoD service matches video streaming is the availability of current season’s TV shows—and both show room for improvement (73).
Streaming subscribers give other aspects of TV and movie programming mostly mid-range scores of 75 to 76, including the number of TV shows or movies available and their variety. The area that needs the most attention is the availability of new movie titles (71), although VoD service rates even lower (69).