Netflix big customer satisfaction loser in '11

@CNNMoneyTech December 28, 2011: 8:44 AM ET

NEW YORK (CNNMoney) -- The customer satisfaction gap between online retailer Amazon and video service Netflix is widening and may pose a significant threat to Netflix's outlook going forward, according to survey results released Wednesday.

Consumer research firm ForeSee Results said that Amazon's customer satisfaction score climbed two points to 88 on its 100-point scale, the best reading ever in 14 years of checking satisfaction with online retailers.

There was a five-way tie for second place, with Apple (AAPL, Fortune 500), Avon (AVP, Fortune 500), JC Penney (JCP, Fortune 500), Liberty Interactive (LINTA) unit QVC and VistaPrint (VPRT) all scoring 83 for customer satisfaction with their online services. Most matched or improved their scores from last year, with only QVC taking a one-point step backwards.

But ForeSee said that Netflix's satisfaction score plunged to 79 from 86 a year ago after it announced and then had to abandon plans to separate its online streaming service from its deliver-by-mail DVD rentals.

"After years of being separated by a point or two, Amazon and Netflix, which are increasingly in direct competition as Amazon (AMZN, Fortune 500) expands into streaming video and rentals, are now separated by nine points in terms of satisfaction, a gulf that may be too wide for Netflix to overcome anytime soon," said ForeSee's statement about the survey.

Netflix slashed its subscriber estimates and will lose money for the full fiscal year due to backlash against its plans. Netflix (NFLX) shares have plunged 76% from its high point in July.

"Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors," said Larry Freed, president and CEO of ForeSee. To top of page

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