For cable companies, the bad news about public perception keeps getting worse. 

First the beleaguered pay TV providers were rated next-to-last on the most recent American Customer Satisfaction Index, dropping 4.4% to a 65 rating. The only industry to score worse was Internet service providers. Since all the major cable companies are ISPs as well, it seems the only thing people like less than cable companies is another division of those same businesses. That's like someone telling you, "The only thing I like less than your appearance is your personality."

Now, a new study released last week from management consultancy cg42 paints a grim picture for the nation's five biggest cable companies: Comcast (CMCSA -5.82%), Time Warner Cable (NYSE: TWC), Cablevision (NYSE: CVC), Charter, and Cox. Based on a survey of more than 3,000 current customers, cg42 used what it calls its "Brand Vulnerability Index" to measure consumer frustrations with each cable company and rank the providers according to their risks of customer attrition and revenue loss.

Responses were collected, analyzed, and modeled to produce a ranking of the cable companies by vulnerability, from most to least, finding that the most vulnerable brands are also the two in merger talks. Here is a look at the list. 

  1. Comcast
  2. Time Warner Cable
  3. Charter
  4. Cablevision
  5. Cox

An overwhelming 53% of customers told the study they are frustrated by their primary cable provider. The top-reported frustrations were uncompetitive pricing, "nickel and diming," and the fact that there are better deals for new customers than existing ones. People also expressed displeasure at the lack of choice due to limited competition.

Leaving more than half of your industry's customers dissatisfied is a fairly impressive feat. The biggest question the study raises isn't "Why are people so upset?" but "Why have they stuck around for so long?" 

Could it really cause people to leave?

In the early days, cable companies had literal monopolies. A town or city contracted -- usually in a long-term deal -- with a cable provider that had an exclusive franchise to operate within the community. Those sweetheart arrangements were necessitated by the fact that multiple companies were not going to spend money building infrastructure simply to compete for customers. Rolling out pay TV across the country was expensive, and offering local kingdoms to providers enticed them to bring the service essentially everywhere, not just the most densely populated markets.

In recent years the cable monopoly has dimmed, but most Americans still have limited choices. The satellite companies -- DirecTV (DTV.DL) and Dish Network (DISH) -- offer an alternative for almost everyone, but at the moment those companies only offer pay TV, not Internet service. (That will change if AT&T (NYSE: T) and DirecTV complete their merger.) Still, for the vast majority of Americans the option of having cable and Internet from one provider means going with a cable company. That might be distasteful with so many people disliking those entities, but when the alternative is less convenient, most people seem to stay put.

The same can be said of cord-cutting. Even if you drop cable altogether and watch TV using digital streaming services, you still need Internet access. In many markets customers have two choices for ISPs -- the cable company or the phone company. Both are scored poorly by ACSI, and customers don't usually switch from a company they don't like to one they dislike a little less.  

Will this finally change?

The cg42 report finds that after years of frustration consumers may have reached a breaking point. The research firm's study said that the cable companies have $7 billion in revenue in jeopardy across all brands examined and that those companies are in danger of losing much of it. 

"Only a small portion of this total is expected to recirculate among these five competitors, while the remaining sum will exit the category in favor of satellite companies as well as streaming options and other new offerings," according to the study.

"The astronomical levels of customer dissatisfaction we've found in the cable industry are unmatched by any other industry we've ever examined," said Stephen Beck, founder and managing partner of cg42. "With more customers exploring other options, it's critical for traditional cable providers to understand how their frustrating services and policies are impacting customer behavior—and ultimately their balance sheets."

It's important to note that while $7 billion is a huge sum to put at risk, it's only 9% of the surveyed companies' total current revenue. Still, losing 9% of your business because you can't manage to treat your customers well is significant. Some of the other survey findings suggest the numbers could get worse: 
  • 72% of consumers worry that they'll be worse off the larger cable companies become.
  • 53% of frustrated consumers would leave their current cable company if they actually had a choice.
  • The majority of consumers would prefer to have one provider for all content rather than using multiple providers.

The first two bullet points suggest that people are dissatisfied and would consider leaving, while the third is only relevant because the DirecTV/AT&T merger will offer the first widespread one-bill alternative for large swaths of the nation.

How the survey was conducted

BVI surveys four components of brand vulnerability, including frequency of customer frustrations; customer sharing behavior (such as disclosure of frustrations on social media); the impact of frustrations on customers' likelihood to leave; and the uniqueness of a frustration to a particular cable provider. The study also breaks consumers down into three categories --Traditionalists, or cable-only subscribers; Omnivores, or people who use both cable and streaming services for content; and Cord Cutters, or those who have decided to leave their cable companies. The highest levels of frustration were found among the Omnivores.

What happens next?

Ideally cable companies, or at least a cable company, would see that consumers may soon have options they never had before. A long-entrenched practice of treating customers poorly is hard to change, and it seems unlikely that the industry will be able to pivot. It's possible that one of the five -- soon to be four -- major players sees the light and does what T-Mobile has done in the mobile phone industry -- shake up the status quo and act differently.

Sadly, that's unlikely, and cable companies are more likely to follow the record and newspaper industries down a path of disaster. Anyone with an Internet connection can see that the business of selling pay television is changing, with leverage returning to paying customers. If cable wants to remain the giant it is now it has to change and prioritize keeping people happy over wringing out every last nickel. That's a very difficult pivot to make and nothing currently being done by the big five suggests it's likely to happen.