2 Industries That Are Even More Despised Than Airlines

Source: Flickr user Joselito Tagarao.

If you were asked to name the first thing that comes to mind when you think about the airline industry, chances are it wouldn't be something pleasant. While airlines get us from Point A to B faster than any other mode of transportation, it's more like a necessary evil. Most of us don't dwell on the magic and convenience of modern air travel. It's the long security lines, cramped quarters once on the plane, and the occasional flight delay or cancellation that crowd our memories.

Yet, peruse the 43 different industries that the American Consumer Satisfaction Index ranked in 2014 and you'll discover that the airline industry is only the third least-liked of all. In fact, customer satisfaction with the airline sector is tied for its highest score in 16 years, likely a result of the shock and awe of optional pricing fees wearing off.

But, this means there are two other industries which are even more hated than the airlines. Would you care to venture a guess as to which industries those are?

Why customer satisfaction matters
While you ponder what those industries might be, let me touch on why the ACSI's annual survey is important in the first place. Though it should be noted that ACSI's study only encompasses a small group of respondents within the U.S. and may not be representative of how the entire country feels about an industry as a whole, customer satisfaction scores can give us insight into the brand loyalty of consumers.

Generally speaking, lower customer satisfaction scores would indicate that consumers are probably less willing to be emotionally attached to a brand and would consider jumping to a competing brand if it saved them money, or if it offered them either a superior product or service. Therefore, any company which can excel in undercutting its competition in price, or which offers an innovative product or service platform could have a substantial edge in attracting customers in these most-despised industries.

Two industries even more hated than the airlines
Now that you've had some time to ponder, do you have a guess as to which two industries consumers are even less satisfied with than the airline sector?

If you said subscription television service providers and Internet service providers then either you have a crystal ball that I need to inquire about, or you too have had an unpleasant experience with one or both of these industries.

Source: Flickr user Dan Taylor.

Consumers aren't digging what subscription TV service providers are dishing
Coming in second-to-last with a score of 65 (out of 100) was the subscription television service industry. Overall this was down 4% from the previous year, but is historically higher than the 61 to 64 that it scored between 2001 and 2009. Of the eight major subscription television service providers that ACSI scored, all eight saw their satisfaction drop year-over-year. Only Cox Communications holds the distinction of having a current satisfaction score that's on par with the score it received when it was initially included in the rankings in 2004. Every other subscription TV service provider, including Time Warner Cable (NYSE: TWC) which ranks dead last in satisfaction by a mile, has seen their score fall over time.

Why are consumers so critical of subscription TV services? A lot of that has to do with rapidly rising prices. Based on the ACSI's report, subscription TV costs have risen by 6% per year on average, which is about three to four times the rate at which inflation has been increasing over the past couple of years. As additional ways to watch consumers' favorite shows become available, such as with Netflix or other streaming broadband services, it's possible customer satisfaction could fall even further if price hikes continue to widely outpace inflation.

Generally speaking, if consumers are getting more for a higher price point they might still be satisfied, but reliability and/or network spats have also become a common sticking point. For example, Time Warner Cable's month-long blackout of CBS (PARA -0.47%) last year wound up costing the company in excess of 300,000 TV subscribers and certainly ticked off a good chunk of its subscriber base in markets like Los Angeles, New York, and Dallas. 

Consumers were also much less satisfied with call center service in 2014 relative to 2013.

What's not clicking with Internet service providers?
Taking the dubious honor of being America's most hated industry, at least per ACSI's rankings, were Internet service providers with a score of 63, down 3% from the previous year.

Source: Flickr user PhotoSteve101.

Internet service providers, or ISPs, are a fairly recent addition to ACSI's customer satisfaction rankings, so it wouldn't be out of the question to expect their satisfaction scores to be quite fluid over the first couple of years. As we saw this year, CenturyLink (LUMN -5.15%) was the only ISP to see its score rise year-over-year, while a number of ISPs saw their satisfaction scores tank, including Comcast (CMCSA -0.37%) down 8% and Time Warner Cable (again bringing up the rear) down 14% year-over-year. 

Once again, there wasn't one specific factor that made ISPs America's most hated industry, but it was instead a confluence of factors. With the exception of improved satisfaction with regard to data transfer speeds (an indication that infrastructure investments are working), the other nine categories ISPs were judged on saw year-over-year satisfaction declines, including call center satisfaction, all measures of reliability, and consumers' ease of understanding their bill.

Perhaps the most interesting implication here, especially with Comcast and Time Warner Cable merging, is just what might happen to the two already lowest-scoring ISP providers in the immediate future. The assumption, at least based on what I noticed when examining the airline industry's ACSI scores, is that integration issues and falling consumer satisfaction scores following a merger are fairly common. Thus Comcast and Time Warner Cable's merger may actually cost it broadband customers over the short-term.

If you feel so strongly, why don't you leave?
In spite of consumers' blatant dislike for these industries, they surprisingly do quite well when it comes to generating healthy profits. That's because these industries do have one big factor that works in their favor: a high barrier to entry. Since consumers have little to no choice in some markets between TV and Internet providers, these companies essentially boast incredible pricing power.

In sum, no matter how much consumers complain, there's not many other places for them to run to. That could be changing a bit with streaming television options emerging, but ISPs still hold quite the stranglehold on consumers when it comes to choice.