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Consumer Reports Names Netflix Top DVD Rental Service

2 Feb, 2009 By: Erik Gruenwedel

Less than a week after posting recession-proof financials, Netflix Inc. received more kudos when venerable Consumer Reports magazine Feb. 2 said the online DVD rental pioneer rated No. 1 among home video viewing options.

In a survey of its online subscribers to be published in its March issue, Consumer Reports said Las Gatos, Calif.-based Netflix had the highest-rated consumer satisfaction for price, selection and service.

The DVD service beat rival Blockbuster’s in-store and online rental options, in addition to third-party in-store kiosks, walk-in-stores and chain stores. Netflix was also considered a superior rental option over video-on-demand, including cable VOD.

Survey respondents considered Blockbuster Online and Total Access (online rental, in-store return) more-costly options, despite the Dallas-based DVD rental service’s offer of $3.99 per month plan, which is cheaper than Netflix’s lowest-priced plan.

Respondents apparently ignored that Netflix charges Blu-ray subscribers $1 premium per month, compared to Blockbuster, which does not charge extra for Blu-ray.

When it came to rental kiosks, respondents said the attractive $1 per night rental fee was offset by “worse-than-average” title selection, compared to Netflix and others.

The Consumer Reports survey said VOD services tended to be viewed as a supplement to rather than a replacement for traditional rental.

If seeking in-store availability and friendly service, Consumer Reports recommended frequenting local independent, non-chain stores, including Family Video, a 31-year-old walk-in Springfield, Ill.-based chain with 570 locations in 18 states.

Survey results showed that Family Video was better than average for price and that independent stores offered superior customized, customer-oriented service.

“It’s telling that the DVD rental category is still robust,” said Arvind Bhatia, analyst with Dallas-based Sterne Agee, while speaking about Netflix the previous week. “The category still has to be performing for Netflix [and others] to do well.”


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