Our love-hate relationship with streaming and DVD service Netflix is going strong, according to a fresh Consumer Reports survey that found high usage of the site but relatively low customer satisfaction.
In a poll of over 15,000 ConsumerReport.org subscribers, Netflix came out looking like the Internet's number one frenemy. Of the thousands of respondents, 51 percent said they watched movies or TV online, with 80 percent of those using Netflix's streaming service. That subscription mark was higher than any other paid online video service, beating out mighty, corporate-backed competitors like Vudu, iTunes, Amazon Instant, Amazon Prime, and Hulu; unfortunately for Reed Hastings' up-and-down company, Netflix's customer satisfaction rating was a paltry 69, losing out to -- you guessed it -- corporate-backed competitors like Vudu, iTunes, Amazon Instant, and Amazon Prime.
Though the full survey is behind the Consumer Reports paywall, AllThingsD published the satisfaction scores in full. It would appear that, in simple Mean Girls terms, Netflix has accumulated a lot of friends, but that no one considers it to their best friend:
Streaming services (name/reader score):
3. Amazon Instant/74
4. Amazon Prime/70
7. Video-on-demand channels/68
8. Hulu Plus/66
(Vudu, for those wondering, is a multi-device on-demand service for full-length movies now owned by Walmart. You pay a fee for every movie you rent, as you would on iTunes, rather than a flat subscription fee for all-you-can-watch-in-a-month).
The most common complaint against Netflix? Poor streaming library selection. That's a problem that has hounded Netflix ever since company execs announced their attention to decouple streaming and DVD subscriptions. Whereas before streaming came as a free add-on to a DVD delivery plan -- and, hey, who cares if the selection stinks, it's free? -- now customers had to pony up cash for exclusive access, and the quality of the library immediately became an issue. When the infamous Price Hike of July 2011 was announced on the Netflix blog, many commenters ripped into the lackluster streaming selection in the blog post's comments, complaining that it wasn't robust enough to justify its own subscription plan.
Netflix has been trying desperately to build out its streaming catalogue ever since. It has acquired rights to original programming, including series like "Lilyhammer," Kevin Spacey's "House of Cards," and a new season of cancelled Fox show "Arrested Development"; it has targeted indie hits, documentaries, and foreign films, winning the exclusive first rights to stream 2011 Academy Award Winner for Best Picture "The Artist"; and, yes, it has gone after the blockbuster movies that everyone craves, even assuring shareholders in their most recent financial results that summer mega-hit The Avengers would be streaming on the site in 2013.
Shareholders weren't convinced -- the stock is down from a high of around 82.00 on Tuesday to a low of around 56.33 on Thursday -- and neither are its subscribers, if this Consumer Reports survey is accurate. And yet despite all of this frustration and doubt, we just can't seem to quit Netflix: Over 500,000 Americans signed up for the service last quarter, while in July, Netflix viewing surpassed one billion total hours for the first time ever.
There may be nothing good on Netflix, in other words, but we're still paying for it and watching a heck of a lot of movies on it, anyway.
Can Netflix continue to win and retain customers who constantly complain about the quality of the streaming library? As long as its monthly subscription model remains more appealing than those of on-demand services like iTunes, and as long as its library is more robust than those of competitors like Hulu Plus, then perhaps it can. Perhaps, too, when some of these new shows and movies, like "Arrested" and "Avengers," start to hit the streaming site, Netflix will enjoy a turnaround in customer satisfaction and the complaints will die down. Until then, Reed Hastings and crew have some major content acquisition to do in order to avoid the unenviable designation of Internet Frenemy Number One.