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Netflix May Be Eating Into VOD, Premium Networks: Study

June 18, 2012

With its low $8 monthly price, Netflix's Internet streaming service may be eroding usage of movies purchased through video-on-demand and time spent watching premium channels like HBO, according to a study by Parks Associates.

About 16% of U.S. broadband consumers who watch VOD and 17% of those who subscribe to premium programming consider using an online subscription service like Netflix as an alternative, the research firm found.

Netflix streaming users rated the service higher than VOD and premium programming options based on price, although they rated Netflix's picture and sound quality substantially lower.

"Consumers can pay for a month of Netflix for about the same amount as for two pay-TV VOD movies," Parks Associates director of research Brett Sappington said in announcing the study. "Parks Associates research shows consumers know the quality of the [over-the-top] service is not comparable to pay-TV quality, but the cost-benefit comparison is enough to affect their purchase decisions."

From the article, "Netflix May Be Eating Into VOD, Premium Networks: Study" by Todd Spangler.

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