Report: Nearly a Quarter of Netflix Users Would Cancel If the Service Introduced Ads
With original content costs running into the billions of dollars, Netflix may one day be unable to rely solely on subscription fees to generate revenue. If the company turns to advertising, though, an audience already accustomed to uninterrupted movies and television shows may decide to opt out.
According to a consumer survey of 1765 people by Hub Entertainment Research, 23 percent of respondents indicated they would drop Netflix if the service began running commercials. With 60 million subscribers in the United States, that would mean a loss of approximately 14 million users.
Under increased pressure from services like Hulu and Amazon Prime and with several more streaming services in the pipeline from Apple, Disney, and Warner Bros., Netflix has been aggressive in pursuing first-run movies like Roma and Triple Frontier to complement its original programming slate. To offset these costs, Netflix announced a price increase for subscribers in January that raised its traditional HD plan from $11 to $13 a month.
Ads, however, may still be in its future. In 2018, the company tested commercials promoting some of its original programming at the end of episodes.
If Netflix does consider advertising in the future, the survey indicates that it could help stave off a loss of subscribers by lowering prices. Roughly 86 percent of people polled would stick with the service if ads meant the price dropped by $2, and 88 percent would remain if it dropped by $3.