Will Mega-Telecom/TV Mergers Mean Mega-Headaches for Consumers?

As regulators take on the implications of the broadband uber-company that could emerge from a Comcast-Time Warner Cable marriage, another scaled-up competitor is in the making. AT&T announced its $49-billion deal to acquire DIRECTV, a proposal reflecting a reality where TV and telecom continue to blend into “one mutant industry.”

ACSI data have long shown that mergers are no friend of customer satisfaction. Industries where competition is limited—including virtual monopolies like the U.S. Postal Service’s mail delivery—generally show lower satisfaction overall. The airline industry with its hub structure or cable TV with its service area limitations are good examples of poor customer satisfaction.

But in the land of media, voice, data, and video, customers also take a dim view of the quality and value of their service. On one hand, they may be paying for more than they want via supersized TV packages. On the other, Internet service speed still lags consumer desires. ACSI results show that all communication categories fall well below average for customer satisfaction, with ISPs and pay TV at the very bottom among 43 industries.

telecom-v-national

Comcast and Time Warner assert that their proposed merger will not reduce competition because there is little overlap in their service territories. Nevertheless, it’s a concern whenever two poor-performing service providers merge—as well as unlikely that combining two negatives will be a positive for consumers.

comcast-v-tw

As for AT&T and DIRECTV, the two companies do well compared with other pay TV providers, but their ACSI scores have declined relative to 2013. Combining their operations may ultimately mean less choice for pay TV customers, as analysts anticipate that U-Verse subscribers will be shifted to satellite in order to free up space on AT&T’s landline network for better high-speed Internet.

tv-merger-co-compare

Download ACSI Telecommunications and Information Report 2014 »

Hotel Chains: Different Name, Same Experience?

In a recently issued report on travel-related industries, the ACSI analyzes customer opinions concerning the experience offered by nearly 30 popular hotel chains—from budget brands to luxury resorts and everything in between. As expected, the view from a room at price-conscious Econ Lodge (overall ACSI score of 67 on 0-100 scale) or a midscale property such as Ramada Inn (70) stands in sharp contrast to the accommodations of a Ritz-Carlton hotel (86).

But when guests select lodgings that are categorized as either upper midscale, upscale, or upper upscale, their satisfaction level may be quite similar—regardless of which brand or which category they choose.

Hotel-brands-category

For the hotel industry, the ACSI measures nine customer experience elements, such as ease of making reservations, check-in processes, staff courtesy, and loyalty programs. Across all six lodging types, reservation and check-in processes receive strong customer ratings in the 80s. Likewise, guests feel that hotel staff members are courteous and helpful (scores ranging from 82 to 90).

Greater differences emerge for aspects such as quality of amenities or quality of food service, with about 20 points separating the economy and luxury categories. By contrast, guests evaluating upper midscale, upscale, and upper upscale properties see less variation in items like pools, business centers, fitness rooms, mini-bars, restaurants, and room service.

hotel-CE-1

The field tightens further for two ratings that focus in on guest rooms: cleanliness and comfort and in-room entertainment. In the three “upper” categories, guests find the room quality to be nearly cookie-cutter. The 10-point difference between midscale and luxury shrinks to a mere 2 points between upper midscale and upper upscale. Likewise, in-room entertainment spans only 3 points from both upper midscale and upscale to upper upscale. Given this lack of differentiation, brands that can rise above the current standard in these categories may gain an upper hand on their direct competitors.hotel-CE-2

Hotel Brands ACSI Scores 2014 »