Yesterday, I sent Bob what I thought was astounding statistics from the oft-quoted University of Michigan’s American Customer Satisfaction Index on Comcast and cable and satellite TV, which reported that the industry suffers “the lowest level of customer satisfaction among all industries covered by ACSI.” Yes, even worse than airlines, hospitals, and Microsoft. Yet, of course, they still make money money because they enjoy monopolies … for now. Says ACSI:
There seems to be an element of monopoly-like pricing in the cable industry: basic cable services rose 5 percent in 2006 and 93 percent over the past decade, nearly four times the rate of overall consumer prices during the period. Such pricing power usually comes with some level of monopoly protection and most cable companies have little competition at the local level. This also means that a cable company can do well financially even though its customers are not particularly satisfied. Comcast is one of the lowest scoring companies in ACSI. As its customer satisfaction eroded by 7% over the past year, revenue increased by 12%. Net income went up by 175% and Comcast’s stock price climbed nearly 50%. In the first quarter this year, Comcast added 75,000 new cable TV subscribers, a 49% increase, and posted an 80% rise in earnings over the previous first quarter.
In short: They can still make money screwing their customers.
But be warned, cable oligarchs: Your monopoly will end, as newspapers’ did. You will fall. But for you, no one will cry.
I wish Google would win wireless spectrum and use it to create an open network that will finally bring cable and phone companies the competition they, and we, so richly deserve. Cable’s business is built on telling its customers what they cannot do. Google is built on letting us do what we want to do. Cable needs an attitudectomy.