Cable-TV and Internet subscribers remain unhappy customers, new Consumer Reports survey says

Along with death and taxes, lousy cable service seems to be one of life’s certainties. In our exclusive new telecom service Ratings, consumers continued to express dissatisfaction with their TV and Internet providers, giving most poor reviews for value and overall satisfaction.

Once again, some of the largest cable TV companies—including Comcast, as well as Time Warner Cable and Charter (which is making a bid for Time Warner Cable)—are among the bottom dwellers in overall customer satisfaction for TV service, according to the Consumer Reports National Research Center’s latest telecom survey, which ranks companies separately for TV, Internet, and phone service, plus bundled packages of all three services.

Only one of 39 Internet providers received a middling score for value, with the remainder failing to reach even that level of mediocrity. TV-service providers also took a beating, with 20 of the 24 companies earning our lowest scores for value; the rest managed to do just a little bit better. Bundles also weren’t deemed especially good deals, since only one of 20 bundled services got an average mark for value—the others all did worse.

If it weren't for Mediacom Communications (a cable company that serves a little more than a half-million customers in the Midwest and Southeast), Time Warner Cable would have landed at the bottom for both TV service and bundled packages in the survey, just behind Comcast, its former suitor. Charter, just a few steps up in the TV Ratings, didn't fare much better.

But there were some winners, even if that term is relative. Armstrong and WOW (WideOpenWest) were top performers in all the services in which they were rated. And in general, Internet providers that offer fiber-based service had better scores than many cable companies, apparently due to faster speeds and better reliability. Verizon FiOS and satellite-TV companies DirecTV and Dish scored higher better among TV-service providers.

The survey for the first time also asked people about newer video options, uncovering some behavioral shifts in the choices consumers are making when it comes to TV viewing. One not-so-surprising finding: Viewers—especially younger ones—are moving away from cable TV. In the survey, 19 percent of those 45 and younger and 31 percent of those ages 26 to 35 now use a paid video streaming service, such as Amazon or Netflix, as their main means of watching video. And 16 percent of those in the 18- to 25-year-old range watch free online video as their primary source of video.

In total, 33 percent of the respondents said they subscribed to one of the paid video-streaming services, with Netflix (81 percent) being the most popular, trailed by Amazon Prime (46 percent) and Hulu Plus (11 percent). And 12 percent subscribe to more than one paid video service.

One other finding from the survey: It pays to negotiate. Among the 42 percent who said they tried to negotiate a better deal, 45 percent reported that the provider dropped the bundle price by up to $50 per month, 30 percent got a new promotional rate, and 26 percent received additional premium channels.

In just the past few months, a number of Internet-based alternatives to traditional TV packages have emerged. In response, some cable, satellite, and telco companies have responded by offering "skinnier" and cheaper TV packages that have fewer channels.

They're also starting to boost the broadband speeds they offer in many markets. It will be interesting to see if the larger cable companies will be able to move the needle on customer satisfaction over the next year or two with these new efforts to retain their customers.

—James K. Willcox