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J.D. Power: Digital, bundling keeping cable close

Wed, 08/16/2006 - 7:59am
Jeff Baumgartner, CED

Cable is still losing some ground to DBS, but it is closing the gap as a growing number of customers opt for digital services, according to a new study from J.D. Power and Associates.

J.D. Power's 2006 Residential Cable/Satellite Satisfaction Study, which was based on responses from 15,819 U.S. homes, found that digital cable penetration has jumped from 30 percent in 2005, to 41 percent in 2006. While some believe services such as video-on-demand (VOD) are doing their part to sweeten the digital tier, J.D. Power said its findings indicate that the rise is due in part to sticky bundles of digital voice, data and voice services.

"With analog cable subscribers increasingly converting to digital, this [triple play] becomes a major advantage for cable companies in the race against satellite providers to maintain market share," said J.D. Power Executive Director of Telecommunications and Technology Research Steve Kirkeby, in a release.

That only echoes findings shared by Cox Communications earlier this week. The Atlanta-based MSO said the number of satellite customers who moved to Cox has nearly doubled over the last two years, aided in large part by service bundling.

Bundles are also saving customers money. The study found that cable customers spent $58 per month on average, down $1 from 2005. DBS customers, meanwhile, spent $61 -- $3 more than last year.

In a competitive comparison, J.D. Power noted that 29 percent of U.S. homes subscribe to DBS, up 2 percent since last year's study, while 58 percent of homes only take cable, down from 60 percent year-over-year. A sliver of homes in the study - 1 percent - take both cable and satellite services.

Cable also received better marks when it came to general customer satisfaction rankings, which this year were divided into four regional segments for the first time. DBS still led cable in this category, but the delta between the groups was reduced to 50 index points (on a 1,000-point scale), versus a 69-point gap in 2005.

In the North Central Region, WOW! scored best with a 708, the highest mark in the study. That was followed by DirecTV (677), EchoStar (648) and Time Warner Cable (636).

DirecTV led in the East Region with a score of 686, followed by Cox's 664.

Cox won the West with a score of 690. EchoStar was second with a score of 662.

Bright House Networks cooked up the goods in the South Region, posting a 682.

DirecTV was second in the region with a score of 676.

Charts showing complete scores for each region are available on the Web.

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