It’s been a tough year for Netflix, and new research from customer experience analytics firm ForeSee predicts its difficulties will continue beyond New Year’s Eve.

ForeSee, which looked specifically at how satisfied consumers are, found that Netflix has slid down significantly – by seven points and 8 percent to 79 – in the researcher’s Holiday E-Retail Satisfaction Index. Consumers dinged the entertainment service in every element that ForeSee measures, including site content, site functionality, merchandise and prices.

That’s the sharpest drop of any company in the 40 top online retailers that ForeSee tracks.

“Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors,” said Larry Freed, president and chief executive officer of ForeSee. “Raising prices by 60 percent and splitting the baby into separate DVD and streaming services totally undermines Netflix’s cost and convenience advantages. Customer satisfaction is predictive, which means that Netflix’s financial woes may be just beginning.”

This could be good news for Amazon, he believes, since the online leader rose two points to score 88 on the study’s 100-point scale, registering the highest score from any retailer in 14 consecutive studies. Since consumers strongly approve of Amazon, it’s likely that they would choose to add entertainment services to the list of things they buy from the site.

“Amazon may have started as an online bookstore, but it now competes in almost every significant retail category and it is setting the bar very high for any company selling online,” Freed said. “E-retailers have consistently upped their game since we first started measuring holiday satisfaction in 2005, but Amazon is still the 800-pound gorilla of retail, and it just keeps getting better. It’s tough for a smaller retailer to compete with this level of dedication to providing an excellent customer experience.”

Another interesting nugget from the ForeSee report is the rise in consumer’s opinion of JC Penney, which climbed up 6 percent to 83 in the year since it named Ron Johnson, former head of Apple’s retail operations, as chief executive officer this year.

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Photo by Flickr user _tar0_, used under Creative Commons license


  1. Your article is the first to arrange the scores in order of satisfaction rank rather than the way Forbes does which I didn’t quite understand. It’s obvious that there has to be a lot of internet ordering to be included in this list, which I can see why Netflix is included; however, does this include individual rentals as a member or just new subscriptions? I wonder if the people surveyed understood the parameters of what was being evaluated too since the score dropped so drastically; if price is the reason though, that would account for the entire drop. At least Blockbuster sells used DVD’s and Blu-rays, as well as new, unlike Netflix. In fact I had the opportunity to compare service when I recently dropped Netflix after getting a year of free Blockbuster Movie Pass with my new DISH Network TV subscription. I live very close to a distribution center for Blockbuster so that’s not a fair comparison but even though I work for DISH I can say that the $10 a month I will pay after the year is still a good deal since it includes games, Blu-ray and streaming. I find that much alone a better deal than Netflix but DISH also throws in 20 free HD movie channels too so I don’t think it’s even fair to compare at that point since the scales are tipped so far in Blockbuster’s favor.