Annual spend on digital TV tops £5 billion

With the digital switchover looming, nearly nine in ten households (89%) now have digital TV (DTV) on their main TV set. DTV customers are now spending more than £5 billion a year for their service, £1 billion or 23% more than last year. But, according to findings from uSwitch.com's second annual digital TV Customer Satisfaction report, as popularity and spend grows so do consumer expectations. And, unfortunately, many customers are finding their service a bit of a letdown.

The report, based on responses from over 12,000 DTV customers, reveals that customer service is the biggest gripe for consumers with only slightly more than half (52%) satisfied with their provider's customer support services. Incredibly, this is an improvement on last year though, when only 46% of customers were satisfied.

Out of the three providers, Freeview, which wins hands down for value for money, lags badly behind on customer service which is unsurprising given that customers do not pay a monthly subscription. Just over a quarter (27%) of Freeview customers are satisfied, compared with 59% of Sky and 66% of Virgin Media customers. However, customers say that value for money is the most important feature when choosing a DTV provider - and this area is Freeview's strength. Over three quarters (76%) of its customers are satisfied with the value for money it offers, which outstrips competitors.

Taking all aspects of providers' services into account, just three quarters of DTV customers (75%) are satisfied overall with their current provider. The overwhelming response from consumers is that there is room for suppliers to improve and customer support services is the area where socks really need to be pulled up.

Improvements need to be made quickly. At the end of 2008 there were over 22 million digital households in the UK. Despite the wide take up, just three companies continue to dominate the DTV market with a 99% share: Freeview (43%), Sky (41%) and Virgin Media (15%).

Best Overall Provider

Sky and Virgin Media have been voted joint best overall provider by their customers with 76% satisfied overall. This is a real turnaround for Virgin Media, which came bottom of the pack last year with only 68% of customers satisfied.

Virgin Media has improved across all categories since last year's report with 70% of its customers now satisfied they are getting good value for money. Virgin customers pay an average of £19 a month for their DTV service compared to Sky customers who pay an average of £32 a month. Virgin's move to offer more channels and HD services are also likely to be a future vote winner.

Despite customer concerns about the value for money Sky offers, it has maintained its top slot position as best overall provider and recent figures have shown that it continues to be popular even in the current recession. Sky has reported 80,000 new customers in the first quarter of this year and Sky+ HD has driven the group's growth in new customers of Sky+ with a 55% year on year increase. Sky offers the widest range of channels and 37% of its customers rate choice of channels as the most important factor when choosing DTV provider.

Best Value for Money

For the second year running, Freeview remains the undisputed winner of the best value for money award. Over three quarters (76%) of its customers are satisfied they are receiving good value for money and, with boxes available for less than £20 with no monthly charge, it is easy to see why.

Since Freeview's launch in 2002 the total number of digital TV devices sold has reached approximately 40 million units. Freeview is continuing to work hard to ensure its service is as widely available as possible ahead of the completion of the digital switchover in 2012.

Best Customer Support

Arguably the area where consumers really get to experience firsthand what a company's service is really like, customer satisfaction in this area is extremely low. Only just over half (52%) of digital customers are satisfied with the customer service they receive. Unsurprisingly, as Freeview viewers do not pay a monthly fee, it comes bottom in this category, with only 27% of customers saying they are satisfied. Virgin Media has come top of the category with 66% of its customers satisfied with customer service levels, a 7% improvement on last year. However, rival Sky has stood still scoring 59%, exactly the same as last year.

Jason Glynn, communications expert at uSwitch.com, comments: "Although Sky's recent results and market data for last year show that consumers are still happy to spend on digital TV services, Sky and Virgin Media will have to work harder on their customer service levels if they are to justify this cost to customers struggling through the recession.

"With the increased availability of ‘free' digital services and the increasing popularity of online television services such as 4oD and BBC iPlayer, consumers now have a number of low cost options. If fee paying providers want to keep their customers, they have to convince them that their fees are justified. They can do this by providing first class customer service and a real sense of value for money. At the moment this is their Achilles heel, and if they don't work hard to improve they could find themselves limping to a halt as consumers look for other options.

"The 8 in 10 households (80%) who have never switched digital TV providers or haven't switched for over two years should look at the deal they are on to see if it really meets their needs. Consumers wishing to receive a better deal from Sky or Virgin Media should look towards their bundle packages, which offer discounts across home phone and broadband if you take up their TV service."