Study Finds Satellite TV
Is Now Cheaper Than Cable

The average price of a satellite TV subscription this year fell below that of cable TV for the first time ever, according to a new study by J.D. Power & Associates.

The report, released Tuesday, shows that the difference between average prices for cable and satellite TV "narrowed significantly" over the last five years.

Since 1998, the average monthly cost of satellite TV service is up 8% to $48.93 a month. During the same period, the monthly cost of cable surged 41% to $49.62.

Much of that increase comes from the cost of upgrading networks and additional services such as digital TV, video-on-demand and high definition TV. Yet despite the added services, satellite subscription is steadily growing, taking customers away from cable.

"Digital cable hasn't turned out to be the solution the cable industry needed to stem the tide of migration to satellite providers," said Steve Kirkeby, senior director of telecommunications research at J.D. Power and Associates.

Instead, cable companies should focus on improving customer service, the study suggests. Both satellite broadcasters, Hughes Electronics Corp.'s DirecTV and EchoStar Communications Corp.'s Dish Network, received far better customer service ratings than cable operators.

The push to bundle services, or putting multiple services onto a single bill, could also help cable.

The study showed that 38% of cable customers want to combine their cable TV service with some other product.

The 2003 Residential Cable/Satellite TV Customer Satisfaction Study is based on responses from 7,340 U.S. households that evaluated their satellite or cable TV providers.

Write to Ellen Sheng at ellen.sheng@dowjones.com

Updated August 19, 2003 2:32 p.m.