by Marc Bastow | October 4, 2012 10:32 am
Netflix (NASDAQ:NFLX), which has struggled with customer satisfaction issues in the past, is clearly making a comeback based on a recent Citigroup (NYSE:C) customer satisfaction survey from last month that found 48% of its customers are “very or extremely satisfied”, up from a 45% rating in the first and second quarter of the year.
The improved customer satisfaction has found its voice in NFLX’s stock price, which jumped 10.8% on Wednesday and continued to rise, up another 3.7% in early Thursday trading.
The stock is now up 22% from its 52-week low of $52.81 reached in August, but still well below its 52-week high of $133 set in February.
The internet subscription streaming service has been under pressure on a number of fronts, in particular concerns over advancing competition from Verizon (NYSE:VZ), who’s online venture with Coinstar’s (NASDAQ:CSTR) Redbox could cut into subscription growth and revenue. In addition, internet giant Amazon (NASDAQ:AMZN) continues to add content to its Prime streaming service, adding another layer of competition to the sector.
However the biggest damage done to Netflix was a self-inflicted wound when it announced a change to is structure and pricing model, requiring customers to pay separately for both movies and streaming content. The model blew up in the company’s face amid an uproar of protest as the stock price dropped.
However in the wake of the survey, which as reported by BloombergBusinessWeek included 3,800 Internet users and more than 1,200 current and 700 past users of Netflix, users have decided to forgive and forget.
Additionally, and perhaps with regard to investor concerns over competition, the survey also showed Netflix’s content offerings are doing better, with 37% finding improvement against 16% saying content has declined.
Written by Marc Bastow, Assistant Editor at InvestorPlace.com, who as of this writing was long VZ.
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