Consumers rate Netflix higher than Pay TV VOD & broadcast

June 20th, 2012

I get most of my money’s worth from streaming watch instantly movies or TV programs on Netflix, not from its DVD service.

It not only offers a continuing selection of movies old and new, it has a huge backlog of TV programs. So, if you get into a show like “Sherlock” on PBS’ Masterpiece Theater, you can catch up on the previous two seasons (and what a treat they are) on Netflix via instant streaming.

If you get into a show such as, say, “Battlestar Galactica,” you have four seasons to catch up on and that’s a lot of hours for the money.

A new report from Parks Associates says that Low cost and viewing flexibility give Netflix an advantage over pay-TV VOD and premium broadcast TV.

Netflix rates higher

The study, Choosing Content: Viewing Video found Netflix Watch Instantly rates higher in customer satisfaction than premium broadcast TV because of these factors. Netflix also topped pay-TV VOD in terms of cost.

“Consumers can pay for a month of Netflix for about the same amount as for two pay-TV VOD movies,” said Brett Sappington, Director, Research, Parks Associates. “Parks Associates research shows consumers know the quality of the OTT service is not comparable to pay-TV quality, but the cost-benefit comparison is enough to affect their purchase decisions.”

Netflix heart The Netflix over-the-top (OTT) service also influences the decision processes of pay-TV consumers, raising the possibility of Watch Instantly cannibalizing pay-TV offerings. Parks Associates research found 16% of U.S. broadband consumers, when watching movies on VOD, consider instead using an online subscription service as an alternative.

Similarly, 17% of those watching TV programs on a premium channel like HBO consider using Netflix instead.

“Netflix is competitive against VOD and premium channels because it has a decisive edge in cost,” said John Barrett, Director, Consumer Analytics, Parks Associates.

Pay TV providers adopting their own services

“Its greatest weakness is picture quality, but there are times when the consumer will sacrifice quality for other considerations. Pay-TV providers need to develop alternative services that counter Netflix’s advantages in cost and flexibility.”

Personally, I don’t find the picture quality from Netflix is not a problem. HBO GO seems to stall during delivery quite a bit, but Netflix and Amazon Prime have both worked well on my big wide screen LCD set. Occasionally, Netflix digital transfers do leave much to be desired, but that’s not a delivery problem.

Pay-TV providers worldwide have adopted their own OTT services to combat independent services such as Netflix, but consumer awareness is low and few providers offer subscription OTT services.

Comcast offers an OTT subscription service exclusively to its pay-TV subscribers, and DISH Network offers an online service to its subscribers via Blockbuster. Verizon and Redbox are partnering to offer an over-the-top service later this year.

Just as an aside, Netflix seems to have recovered from its public relations disaster last year when it split its streaming and DVD services, raising prices. It’s subscriber numbers are rising again.

– Allan Maurer

One Response to “Consumers rate Netflix higher than Pay TV VOD & broadcast”

Eddie says:

June 26, 2012 at 2.20.pm.

Netflix and Blockbuster are great services for the price you pay. Netflix online streaming service is cheaper than Blockbuster @ Home but it also offers more bang for your buck. My manager at Dish was the one that suggested I try it out with my new Hopper. I prefer Blockbuster @ Home because it gives you a choice of what kinds of movies you can watch, new releases included. I have a huge library of available titles and I also get movies by mail and the option to get video games too. I’ve never had issues with streaming the movies.