Netflix Might Lose One-Quarter of Subscribers if it Runs Ads

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With Netflix planning to spend more than $8 billion this year on more than 700 original shows, the streaming service has raised concerns that users of the service might have trouble keeping up with it all.

To promote their original content, Netflix has been experimenting with running ads that promote content created in-house to better inform users of what’s on offer.

That strategy could well backfire as a study conducted by Hub Entertainment Research found that nearly one-quarter (23 percent) of respondents say they would drop their subscription if the streaming service included ads.


 

The survey also found less than half (41 percent) saying they would definitely or probably keep Netflix even if it ran ads.

If Netflix offset the price of subscription rates with ads it might retain some subscribers who would otherwise leave. According to the survey if rates were lowered by $3 per month while including ads, the percentage that said they would cancel dipped from 23 percent to 16 percent, while 50 percent said they would likely stay subscribed.

The”The Future of Monetization” study surveyed 1,612 TV consumers aged 16 to 74 who watch at least one hour of TV per week.

When Netflix ran a test in the UK market, a backlash rose up on social media, causing Netflix clarified the policy in a statement to Cord Cutters News saying that viewers could skip these video previews.


 

“Hulu had advertisements from the beginning and Netflix has always been ad-free,”

Jon Giegengack, principal at Hub Entertainment Research, said in a report from MSNBC. “People always feel it more if you take away something that has been there and they’re accustomed to.”

Netflix is currently available just about everywhere in the world with the exception of China which is heavily regulated by the communist party, and Crimea, North Korea, and Syria due to U.S. government restrictions on American firms doing business there.

 

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