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.

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.”

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.

From the article, "Consumers rate Netflix higher than Pay TV VOD & broadcast" by Allan Maurer.

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