• by Daisy Whitney , Op-Ed Contributor, August 7, 2012

On the heels of tepid quarterly reports, Netflix is also losing some of its streaming shine. Research firm The Diffusion Group reported that the company’s price change last year is still impacting its customer base. According to TDG’s research, the number of “highly satisfied” Netflix streaming customers has dipped from 68 percent to 48 percent.

“In mid-2011, two-thirds of Netflix streamers were highly satisfied with the service. Today, less than half are highly satisfied, a decline of 29 percent in just 12 months,” TDG noted in its report.

But the biggest issue for Netflix right now isn’t even price or packaging, or whether consumers like or dislike it. Because the reality is that most of us grouse about Netflix but we use it anyway, and stream old TV shows simply because we want to be entertained. Case in point: Nielsen reported that more Netflix streamers are using the service for TV programming than a year ago -- 19 percent now compared to eleven percent a year ago, while the number of subscribers streaming movies dropped from 53 percent to 47 percent in the same time period. Maybe that’s because on the TV front Netflix now offers "Mad Men," and because the movie options are woefully limited.

The real issue however, TDG says, is that streaming on the TV is becoming mainstream and Netflix is facing serious competition from other providers such as Apple TV, Amazon and even Hulu Plus. Its first-mover advantage is disappearing -- and with shrinking satisfaction, the company has reason to be concerned.