Netflix Could Lose Almost 25% Of Its Subscribers If Ads Are Introduced

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Now that everyone is seemingly coming out with a streaming service, Netflix is going to have to make some changes if it wants to stay ahead of the growing competition. Unfortunately for viewers, that could mean implementing advertisements during movies and TV shows. This decision would definitely be unpopular, but the streaming service is hoping that subscribers would be understanding of the bind they’re in. This, however, doesn’t seem to be the case.

A new study asked 1,765 Netflix users between the ages of 16 and 74 how they would react to the introduction of ads into their viewing experience. The result was definitely not what Netflix was hoping for. 23% of subscribers reportedly claimed that they’d completely drop the service if it began showing ads. That’s practically a quarter of their users and around 14 million of the current 60 million who pay for the product. Losing all of those loyal customers would cripple the company financially, no matter how much they make in ad revenue.

If Netflix is dead set on this new model though, there’s still a way to retain many of those defectors. Lowering the monthly subscription price by $2 a month would cause only 14% of subscribers to leave a Netflix with advertisements. Offering a $3 discount lowers that number to 12%. Causing that many people to flee is still far from ideal, but could be tolerated if the money made from advertisements is enough to offset the loss.

Thankfully, nothing of the sort seems to be on the horizon. Netflix has long maintained that their service isn’t considering running ads. In 2015, company CEO Reed Hastings addressed the speculation by saying, “Our content is our crown jewel. It’s up to us to take [subscribers’] money and turn it into great content for their viewing benefit.”

That was before all of these other streaming platforms started emerging and poaching the content that used to be their’s. It remains to be seen if Netflix continues to adopt that approach with all of this new competition on the way, but for now, viewers should enjoy their watching experience free from any ad disruption. After all, it might not last forever.

Source: CNBC

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