The biggest traditional cable companies -- players including Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR), and Time Warner Cable (NYSE:TWC) -- are among the most-hated businesses in America.
You would think that would be because the price we pay for cable television has slowly inched up and in many cases is just preposterous. Price, however, is not the thing that Americans hate the most about cable. We're also, as a nation, at least somewhat willing to forgive forced bundling, which requires us to pay for stations we don't want to get the ones we do. We can even overlook the various unexplained fees that are now fixtures on many of our bills.
The one thing we can't forgive is being treated poorly. The American people will overlook a lot, but poor customer service is a sin that's not easily forgiven and drives our hatred of cable companies.
How do we know this?
In the most recent American Customer Satisfaction Index report, pay television providers were in general the lowest-rated of all industries covered by ACSI, tied with Internet Service Providers (which, of course, includes many of the same companies). The traditional cable companies, however, rated at the bottom of the category: below phone companies and satellite providers that sell similar pay television bundles.
As you can see above, all the traditional providers are at the bottom of the list, with only Cablevision scoring anywhere near the major phone companies selling pay-TV bundles. The New York Times writer Vikas Bajaj explained the reason why phone and satellite companies ranked higher in an article analyzing the ACSI data.
The report from the American Customer Satisfaction Index suggests that phone and satellite companies, which have not been selling TV service for as long as the big cable companies, are trying just a little harder. Those businesses might be providing more reliable or better quality service or responding faster to complaints.
He added that the price of service was not likely to be a major factor in consumer perception of the various companies because all "tend to charge similar prices for popular TV bundles," according to a Federal Communications Commission report published in 2013.
It's all about customer service
In recent months, Comcast, which is currently undergoing a massive effort to change its customer relations culture, was rocked by a number of customer-related scandals. As a result, the company received an enormous amount of negative press, which likely fed public opposition to its failed merger attempt with Time Warner Cable. (Time Warner Cable has also been the subject of a number of very public negative stories about how it deals with subscribers.)
It's not that companies like AT&T and Verizon are excellent with customers -- the ACSI data still ranks them very low compared to businesses in other industries -- it's just that they are not as awful as the big cable companies.
It's the lesser evil
Pay TV providers give the American public a lot to hate. But big cable companies like Comcast, Time Warner Cable, and Charter have compounded their woes by also treating people badly. This may have worked back in the monopoly days, but with most people being able to choose a satellite or phone company alternative -- admittedly a situation of picking the lesser of two evils -- it seems likely they will.
That option may even get easier now that AT&T owns DirecTV. Big cable should consider itself on notice. Treat customers better, or they may move to another provider -- or even drop pay television altogether.
Daniel Kline has no position in any stocks mentioned. He actually sort of likes his cable company. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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