Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE: TWC) spent much of the last 12 months on their best behavior while they sought federal regulatory approval for their now-scuttled $45 billion merger.
Despite those efforts the two companies endured a series of embarrassing and very public customer service gaffes. That makes it not surprising at all that Time Warner Cables ranks at the bottom of the American Consumer Satisfaction Index's recently released 2015 survey for subscription-TV services, while Comcast ranks third from the bottom.
Little-known Mediacom Communications -- a newcomer to the list -- got between the two companies to come in next to last, sparing the onetime potential partners from having the bottom of the rankings all to themselves. That sounds better than it actually is, though, because Comcast's bronze medal for consumer frustration still represented a 10% drop in its score.
The worst companies in the worst category
Time Warner Cable and Cable not only rank at or near the bottom of the rankings among cable providers, they achieved that status in the lowest-ranked category, according to ACSI:
Customer satisfaction with subscription television service is down 3.1% to an ACSI benchmark of of 63, tied with Internet service at the lowest score among all industries covered by the American Consumer Satisfaction Index. This decline is a result of poor customer service combined with higher prices.
On the slightly positive side, pay TV is not alone at the bottom; instead, it was joined by ISPs. Of course, since Comcast and Time Warner Cable offer both services, that's cold comfort. On the subscription-TV chart Comcast dropped 10% from the 2014 survey -- the biggest decline of any single company -- to a score of 54. Time Warner Cable had the second-biggest drop, 9%, to post a score of 51; the company's ranking ties its own record low from 2008.
Both scores place the two companies well below the category average and show them moving in the wrong direction at a time when they had every reason to improve.
To be fair, both companies did a little better on ISP side, with Comcast coming in last at 56, a 2% drop from the previous year, and Time Warner Cable scoring a 58, a 7% improvement and good enough for fourth from the bottom.
What does this mean going forward?
These numbers have to be particularly disheartening to Comcast, which has taken very public steps to improve customer service. As the leading company in the proposed merger, its actions were under greater scrutiny from federal regulators, and its failure to get its act together suggests how deep its customer service problems go.
On the positive side, the company should fare better on the next survey as it carries out its customer service improvements. The company has put well-regarded longtime executive Charlie Herrin in charge of those efforts and recently pledged to create 5,500 new jobs in customer service.
"We'll be successful when our customers see and feel this change in every interaction with us -- from the first time they order and use our products to the way we communicate with them or respond to any issues," said Herrin in a press release. "We won't stop until we get there, and we will never be 'finished' delivering a better experience to our customers."
Time Warner Cable, on the other hand, looks likely to disappear by the next survey, as it is now in the process of being acquired by Charter Communications (NASDAQ:CHTR).
This is bad for the industry
While it's easy to poke fun at Comcast and Time Warner Cable for their failings, the real loser here is the entire pay-television industry. With streaming services including Netflix (NASDAQ:NFLX), Hulu, and Amazon.com (NASDAQ:AMZN) Prime Instant Video, as well as more direct digital competitors such as DISH Network's (NASDAQ:DISH) Sling TV service, consumers have more options than every beyond pay TV.
The cable companies need to either improve how they treat people or their customers will leave. That hasn't happened yet in great numbers, but it very well could as options for cord cutters grow increasingly toward the ability to have cable-like experiences without a cable company.