Netflix will hemorrhage subscribers if they insert advertisements, study shows
There are several reasons why Netflix is everyone’s favorite streaming platform: There’s the (mostly) quality original content, the Parks And Recreation backlog, and, perhaps most importantly, the lack of shrill, looping ads. Last month, we reported that the service is testing out what it calls “recommendations,” which would manifest as ads for content in between episodes of shows you’re streaming. Despite this being a horrible idea, Netflix seemed jazzed about the idea, comparing the ads to the auto-playing video previews that are also a horrible thing that nobody likes.
Now, entertainment research firm Hub has some hard data that will hopefully change their minds. In a new study, Hub asked roughly 1,612 U.S. TV viewers between the ages of 16 and 74 how they’d react to these promos. A staggering 23 percent said they’d unsubscribe, while another 37 percent were left undecided. The other 41 percent said they’d be fine with Friends rewatch being continually interrupted by Finn Jones telling you that, no, Iron Fist is good now, we swear. Viewers were more amenable to the ads if it meant Netflix lowered its subscription rate by a few bucks. If that were the case, only 16 percent would cancel—which, while a good portion less, would still substantially impact Netflix’s base.
“When we ask subscribers what they consider to be the most attractive features of Netflix, the fact that it’s ad-free consistently ranks toward the top of the list,” Peter Fondulas, the study’s co-author, said in a press release. “For the moment, that remains a key distinguishing characteristic of the service, especially as other OTT providers attempt to compete with high-quality original shows of their own.” Hey, there are no ads on DVDs, which Netflix is apparently still sending out.
Below, you can see an infographic with some of the study’s other results, which essentially boil down to the lengths to which TV viewers are willing to go to not have to engage with ads of any sort.