A new study by market research firm Parks Associates revealed the low cost and viewing flexibility of Netflix is driving consumers to prefer the subscription commerce model over the pay-per-view on-demand standard.
The report also noted that the cost of Netflix is driving its adoption, as users can pay for a month of Netflix videos for a similar price to only a few on-demand movies.
“Netflix is competitive against and premium channels because it has a decisive edge in cost,” Parks Associates consumer analytics director John Barrett said. “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.”
Conversely, a study by Bernstein Research revealed that traditional cable will not likely yield to Netflix and other subscription commerce models anytime soon. This is largely because consumers still enjoy watching live TV and many online and on-demand services don’t offer viewing at the same programs air on TV.
Nevertheless, deploying subscription services is becoming more popular across a number of industries. More businesses are recognizing the value of offering customizable service and product options through subscription commerce models, which can boost client experience and satisfaction.