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If Apple does indeed plan to tackle the television market the way it did the music industry, it needs to have some revolutionary products and services in the works.
Premium television package subscribers are more loyal and more likely to purchase additional products from their television provider than are subscribers with basic and expanded basic programming packages, according to the J.D. Power and Associates' "2012 U.S. Residential Television Service Provider Satisfaction Study."
The study finds that 31% of premium package subscribers say they "definitely will not" switch providers, compared with subscribers of expanded basic (22%) and basic (20%) programming packages. Additionally, premium package subscribers serve as brand advocates more often, as 26% say they "definitely will" recommend their provider, compared with subscribers of expanded basic (16%) and basic (14%) packages.
Overall customer satisfaction with residential television service directly correlates with a household's programming package. Premium package subscribers are most satisfied with their television service, reflected in an index score of 716 (on a 1,000-point scale). Satisfaction is significantly lower among expanded basic subscribers (677) and basic subscribers (656). Although having the highest satisfaction, premium package subscribers account for the fewest number of subscribers (13%), compared with expanded basic (38%) and basic (49%) subscribers.
"After several years of declining subscription to premium programming packages associated with the economic downturn and the introduction of attractive over-the-top alternatives, it appears premium programming is making a comeback," says Frank Perazzini , director of telecommunications at J.D. Power and Associates. "Premium package subscribers have proven to be better brand advocates. Television providers catering to these high-value subscribers with video-on-demand and mobile applications will be well positioned to keep these customers and grow their relationship, moving forward."
Although premium packages cost more than expanded basic and basic programming, satisfaction with cost of service is higher among premium package subscribers (633), than among expanded basic (588) and basic (567) subscribers. In fact, premium package subscribers are more willing to pay for even more video content, as 42% of these customers say they are likely to order video-on-demand programs in the next six months, which is significantly higher than among both expanded basic and basic cable subscribers (37% and 27%, respectively).
The study measures customer satisfaction with cable, satellite and Internet protocol (IPTV) television providers in four regional segments: North Central, East, West and South. Six factors are measured to determine overall customer satisfaction: programming; performance and reliability; customer service; cost of service; billing; and offerings and promotions. The 2012 "U.S. Residential Television Service Provider Satisfaction Study" is based on responses from 20,687 U.S. customers nationwide who evaluated their cable, satellite or telephone company-based provider. The study was fielded in four waves: November 2011, January 2012, April 2012 and July 2012.
-- Dennis Sellers