Cable and internet service providers (ISPs) have done a lot to lose the trust of the American public. That happened largely because, for a long time, the biggest players in those spaces held monopolies.
Now, even though streaming services have broken the monopoly on the cable side, these companies have yet to change how they operate. That's why cable and ISPs remain the lowest-ranked among all the industries tracked by the American Customer Satisfaction Index (ACSI). After peaking with a 68 on the 100-point scale in 2013, these two industries sunk to a 62 last year and matched that number this year. For comparison, among the 46 industries ACSI tracks, the average score was 76.9. Breweries topped the list with a customer satisfaction score of 85.
"In 2018, [pay TV] subscription sales declined 3% to $103.4 billion," according to the ACSI report. "Customer service remains poor and cord cutting is accelerating. As video streaming services gain traction, a growing number of households may never subscribe to pay TV in the first place."
The worst of the worst
AT&T (NYSE:T) tops the pay television category with a score of 70, followed by Verizon (NYSE:VZ) with a 68. That's interesting because while those two companies have their own customer service issues, they're actually outsiders, in a sense, in the cable space.
The traditional cable companies Cox, Charter (NASDAQ:CHTR), and Comcast (NASDAQ:CMCSA) all rank below the average for the industry. Those large cable giants have pledged to offer better service, but that clearly has not worked.
And, while consumers have options in the cable space, that's often not true when it comes to the internet. In addition, while streaming services give consumers an option to use cable, there's no viable option when it comes to ISPs. Cord cutters need internet service if they want to stream anything, and that means that in many markets consumers still have no choice.
"The cable industry is also the leading provider of broadband internet connections, and data-rich video now accounts for more than half of all internet traffic," according to the report. "While many firms posted gains this year, service is largely considered to be slow and unreliable, and competition is limited in many areas. Most ISPs are still falling short of providing good service at an affordable price."
Not able to improve?
On the cable side, these companies know they need to get better, yet they have shown that they can't. That's understandable for Frontier (NASDAQ: FTR), a small player with financial troubles. It's much harder to understand for industry leaders Comcast and Charter.
These are industry leaders that have covered cable losses with broadband gains. That works for now, but what happens over the next few years when 5G offers an alternative to traditional internet?
At that point, a mass exodus could occur because the biggest cable companies have done nothing to create loyal customers. Right now, people can't leave. Once they have an alternative, they probably will.