Fiber-Optic Providers Show Strength in TV Service Markets

 |  Includes: CMCSA, DISH, T, TWX, VZ
by: ChangeWave Research

By Paul Carton

Recent ChangeWave consumer surveys have revealed a shift occurring away from traditional TV viewing towards new types of online services and entertainment – a trend with worrisome long term implications for traditional TV service providers.

But focusing on the short term, a recent ChangeWave survey of 2,922 U.S. and Canadian consumers identified winners and losers in the current market share battle among TV service providers.

Cable Leads But Fiber Looks Strong

According to our latest survey, Cable (65%) still owns the bulk of the TV market, even though it’s been slowly ticking downward for much of the past 2+ years. We note, however, that they have gained 2-pts since our previous survey in March.

At the same time, Satellite providers (25%; down 1-pt) have remained relatively flat, even as the core growth story over the past two years has shifted to the fiber-optic TV service providers (11%). But what does this mean at the individual provider level?

Cable Companies: Comcast (NASDAQ:CMCSA) (23%; down 1-pt) is still the market share leader, but has been gradually sliding for the past year. Time Warner (NYSE:TWX) (11%; up 1-pt) remains a distant second – still stuck at the same level of a year ago.

Satellite Companies: DIRECTV (DTV) (13%; unchanged) continues to hold the market share advantage over DISH Network (NASDAQ:DISH) (9%) – which dropped 1-pt to its lowest level ever in a ChangeWave survey.

Fiber Companies: Verizon (NYSE:VZ) FiOS (5%) and AT&T (NYSE:T) U-verse (3%) have been gaining share steadily – albeit slowly – since they rolled out their fiber services.

Importantly, Fiber TV providers also boast a big lead when it comes to customer satisfaction levels – with an overall 38% Very Satisfied rating, followed by Satellite subscribers (27% Very Satisfied) – both which remain far happier with their TV service than Cable subscribers (13% Very Satisfied).

The difference is even more evident at the company level, where Verizon continues to have the most satisfied customers (47% Very Satisfied), followed by AT&T’s U-verse service (39%) and then DIRECTV (34%).

The cable companies rank at the bottom in terms of customer satisfaction – with Time Warner (11%) and Comcast (11%) tied for dead last.

Future Share: Customer Switching. Looking ahead, we asked respondents if they planned to switch TV service providers in the next six months, and only 12% report they’ll be switching – down 2-pts from March.

Among this group, Price (50%) is the top reason respondents plan to switch, while Bundling of Services (10%) continues to be of lesser importance.

So which type of TV provider are switchers moving to?

More than one-in-two (54%) switchers say they’ll choose a fiber-optic service – which is an 8-pt increase since our previous survey just three months ago.

Verizon FiOS TV (28%; unchanged) remains the top provider that switchers plan to move to in the next six months. But AT&T’s U-verse service (23%) has jumped a big 7-pts since our March survey and is currently showing the most momentum among providers.

Note that DIRECTV (20%; down 5-pts) maintains a two-to-one market share advantage over DISH Network (10%; down 2-pts) – but both are hitting new lows. Cable providers bring up the rear – with just 4% of switchers saying they’ll sign up with Comcast (up 1-pt) and 1% for Time Warner.

Thus while cable and satellite providers still lead in terms of current share, their problems continue to grow.

In comparison, fiber-optic companies are excellently positioned to be the biggest winners in terms of future market share growth.

Andy Golub co-wrote this article