High Levels of Consumer Frustration Put $7 Billion of Revenue at Risk for Top Cable Companies

WILTON, CT--(Marketwired - Jun 5, 2014) - A new study released today by management consultancy cg42 paints a grim picture for the nation's five biggest cable companies: Comcast, Time Warner Cable, Cablevision, Charter, and Cox. Based on a survey of more than 3,000 current customers, cg42 utilized its Brand Vulnerability Index (BVI) to measure consumer frustrations with each cable company and rank the providers according to their risks of customer attrition and revenue loss.

Responses were collected, analyzed, and modeled to produce a ranking of the cable companies by vulnerability, from most to least, finding that the most vulnerable brands are also the two in merger talks:

1. Comcast
2. Time Warner Cable
3. Charter
4. Cablevision
5. Cox

With 53% of customers frustrated by their primary cable provider, the top reported frustrations are uncompetitive pricing, nickel and diming, better deals for new customers than existing ones, and lack of choice due to limited competition. This translates to a projected $7 billion in revenue in jeopardy across all brands examined by cg42; only a small portion of this total is expected to recirculate among these five competitors, while the remaining sum will exit the category in favor of satellite companies (like DirecTV and DISH) as well as streaming options and other new offerings.

"The astronomical levels of customer dissatisfaction we've found in the cable industry are unmatched by any other industry we've ever examined," said Stephen Beck, founder and managing partner of cg42, which has produced studies with alarming results in the technology and retail banking sectors. "With more customers exploring other options, it's critical for traditional cable providers to understand how their frustrating services and policies are impacting customer behavior -- and ultimately their balance sheets."

BVI surveys four components of Brand Vulnerability, including: frequency of customer frustrations; customer sharing behavior (such as disclosure of frustrations on social media); the impact of frustrations on customers' likelihood to leave; and the uniqueness of a frustration to a particular cable provider. The study also breaks consumers down into three categories -- Traditionalists, or cable-only subscribers; Omnivores, or people who use both cable and streaming services for content; and Cord Cutters, or those who have decided to leave their cable companies -- finding the highest levels of frustration among the Omnivores.

Key findings from the study show that:

• 53% of all cable customers are frustrated by their providers.
• Projected revenue loss due to these frustrations is $7 billion, or 9% of the surveyed companies' total current revenue.
  • Comcast and Time Warner Cable are most vulnerable to losing customers and revenue: $3.4 billion of Comcast's revenue is at risk, as is $1.7 billion of Time Warner Cable's.
• 72% of consumers worry that they'll be worse off the larger cable companies become.
• 53% of frustrated consumers would leave their current cable company if they actually had a choice.
• The majority of consumers would prefer to have one provider for all content rather than using multiple providers.
  
  

cg42 has conducted BVI studies in other industries, including financial services and hospitality, and the BVI framework can be applied in a variety of sectors to produce similar results. For more information on cg42's studies, or to download a full report, please visit www.cg42.com. 

About cg42
cg42 is a boutique management consulting firm that pioneered the approach to transforming competitive vulnerabilities and marketplace frustrations into greater market share for our clients. Through our patent-pending Brand Vulnerability methodology, we help businesses quantify their customers' frustrations, as well as those of their competitors, so they can better align the operations, finance, and marketing functions behind the core principle of creating customers. cg42 has helped companies in the technology, telecommunications, financial services, consumer services, and hospitality sectors make the immediate and long-term changes necessary to create significant top-line growth and incremental profitability. For more information, please visit: www.cg42.com. And remember - Don't Panic.