Consumer Reports: Cord Cutting Continues, Fueled By High Cable Pricing

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When Consumer Reports asked its members for feedback on their pay TV, home internet, and bundled plans, most companies got poor marks for value and many for customer service.


A good percentage of people said they were thinking of canceling their pay TV contracts with their cable or satellite company, and acknowledged frustration with everything from unexpected fees to rates that suddenly spike after their promotional period ends.

But, a couple of bright spots emerged from the survey of more than 108,000 Consumer Reports members.

Google Fiber, which offers TV and internet service in 18 cities throughout 10 states, did well enough for internet service that it topped CR’s ratings for overall satisfaction.

Another high point: CR members were very successful in negotiating with providers to get lower prices or better deals.

“Unlike other services we rate, we find that CR members are very willing to haggle with their cable and internet provider for a better deal,” says Adam Troy, senior research associate in Consumer Reports’ survey department. “These efforts usually pay off, as over three-quarters of negotiators in our survey got a price reduction or other perks.”

Despite the growing number of options for free and streaming TV services, 77% of CR members still subscribe to a traditional pay TV service. But, that’s not the only way people watch live TV broadcasts. Reflecting a growing national trend, 22%of members said they use an antenna to get free over-the-air TV signals on one or more of the sets in their home.

Cord cutting is continuing at a fast pace. Among those who currently have a traditional pay TV service, 20% —one in five—said they were very or extremely likely to drop it in the next year.

One huge incentive: the ever-escalating cost of traditional pay TV service. Of those members who cut the cord last year, 62%t cited rising rates as a reason. In this latest survey, every single pay TV provider earned our lowest rating for value.

But, it’s not just TV, Consumer Reports notes. The story is the same in other service categories.

For example, 16% of those with a home phone service said they were highly likely to discontinue it within the next year.

Just 6% of members who pay for home internet service said they were likely to drop it.

For context, people don’t just drop the big cable and internet companies. There’s turnover among streaming services, too, with people picking up and dropping individual services as channel lineups and pricing changes.

Fifteen percent of survey respondents who subscribe to a cable-replacement streaming service such as Sling TV or AT&T TV Now said they were highly likely to drop them within the next year. Six percent of those who subscribe to an individual streaming service such as Netflix said they were highly likely to drop it.

Bundle Grumbles

Bundles that combine TV, internet, and phone service are sometimes described as the glue that binds people to traditional TV companies, because these packages promise to offer convenience and, especially, savings.

More than two-thirds of the survey respondents who had a telecom bundle said they received a special promotional price when they signed up. Some 44% were still paying that rate when they answered the CR survey.

All of the companies CR rated received subpar value ratings for their bundles, regardless of the median price customers were paying.

For instance, customers of Optimum by Altice reported paying a median of $201 per month for a bundle, and that company received CR’s lowest possible rating for value. Customers of Windstream paid roughly half as much, on average—just a median of $103 per month for a bundle plan—and that provider got the same low rating. (Respondents paid a median price of $173 per month for bundles, across all providers.)

There was also no meaningful difference in the two companies’ overall satisfaction scores, and no difference in their customer service ratings.

When it comes to TV/internet bundles, consumers have few choices. More than a third of survey respondents (35%) who had a bundle said a lack of options was a primary reason for choosing their company. Only 16% of bundle customers picked the one they thought had the best price.

It Pays to Haggle

A big takeaway from CR’s survey is that when it comes to internet, TV, and phone bundles, it pays to haggle—and most CR members do.

Two-thirds of the respondents said they tried to negotiate a better deal at some point. The overwhelming majority—76%—succeeded in getting a discount or other perk.

About a third of those who negotiated with their provider received a lower price and/or got a new promotional rate. Thirteen percent were able to get faster broadband speed, and 11 percent received additional premium channels, such as HBO or Showtime. Nine percent were able to extend their original promotional rate. In fact, some hagglers walked away with multiple perks.

WOW, SuddenLink Communications, and Mediacom customers were the most likely to get a discount when they asked for one. Customers of Verizon, Frontier Communications, Optimum by Altice, and Charter (Spectrum) were the least likely to get a discount.

 

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