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Three out of four Netflix subscribers would rather cancel subscription than view ads

By Shawn Knight
Jun 23, 2016
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  1. Netflix was a pioneer in the early days of streaming video. After dropping a bomb on the traditional video rental industry in the first half of the 2000s, Netflix has spent the last decade forging a streaming business model that is loved by its customers (but has also served as a blueprint for the competition).

    Competition is typically seen as a good thing for consumers but that’s not always true. In the streaming industry, companies like Amazon and Hulu are vying for the same licensing contracts as Netflix. This means that A) Netflix will have to pay more to license content, B) it’s not going to win every contract and C) some customers will inevitably jump ship to a competitor, resulting in less revenue coming in.

    There are a couple of possible ways to handle the situation – raise membership rates or introduce ads –neither of which are great options for the consumer. But that begs the question, which of the two options would you rather have if you had to choose.

    That’s the very question that AllFlicks recently asked of more than 1,200 people on Reddit: would you rather pay more for Netflix or see advertisements while you stream? Incredibly enough, 90 percent of respondents said they would rather pay more per month than have to sit though ads.

    Those that said they’d rather pay more were asked how much more they’d be willing to part with each month. The overwhelming majority said they’d be willing to pay between $1 and $2 more to continue to receive an ad-free experience. Just over 20 percent said they’d spend up to $3 more while around 15 percent said they’d drop an additional $4 or more to keep ads at bay.

    When asked if the introduction of ads would drive them away from Netflix, a staggering 74 percent said they would cancel their subscription if the company introduced advertisements.

    While Reddit isn’t the most scientific of venues to host a poll for a multitude of reasons, the numbers speak for themselves. As AllFlicks notes, the results likely gel with Netflix’s own internal findings which is why we haven’t yet seen ads make their debut. It’s highly unlikely that three out of four users would actually leave if ads were introduced but if even just a fraction of them did follow through with their threat, the impact would be tremendous.

    That said, we’d like to hear your opinion on the matter. If you’re a current Netflix subscriber, would you consider canceling your subscription if ads were introduced? Also, how much additional per month would you be willing to fork over to keep Netflix ad-free? Chime in with your thoughts in the comments section below!

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  2. Cycloid Torus

    Cycloid Torus TS Evangelist Posts: 1,657   +309

    " In the streaming industry, companies like Amazon and Hulu are vying for the same licensing contracts as Netflix. This means that A) Netflix will have to pay more to license content, B) it’s not going to win every contract and C) some customers will inevitably jump ship to a competitor, resulting in less revenue coming in."

    Then how is this competition? Sounds more like vying for (and overpaying for) exclusivity, so they can entice specific segments. Why would a content provider agree to exclusivity? The content provider would probably make much more with 3 streaming companies than just one.

    In the end, I only expect that the 'non-compete' streaming model will last where the content provider is the streaming company as well.
     
  3. MoeJoe

    MoeJoe TS Maniac Posts: 399   +207

    Millennials don't care about ads on their big screen
    because they are too busy creating them on their Facebook small screens.
     
  4. Adhmuz

    Adhmuz TechSpot Paladin Posts: 1,648   +521

    I'd cancel if they introduced ads pure and simple, the whole reason I have NetFlix is to enjoy content ad free, and if I can't watch it ad free through a paid for method, for example TV which you pay for but get ads forced upon you so I refuse to pay for such a thing, that content can be acquired in other ways.
     
  5. gingerbill

    gingerbill TS Addict Posts: 227   +50

    I hate ads and would cancel immediately and download everything if it's the only ad free way.
     
  6. Hexic

    Hexic TS Addict Posts: 283   +132

    That "Millennials are so crappy for reason x, y, and z" is a bunch of BS, and it's getting old. Show me a millennial addicted to Facebook (which definitely happens), and I'll show you a Gen X that has a perpetual problem of living in the past, and being a stubborn tool - who's also on Facebook. That assumptive attitude makes that person sound like the very attitude they're slamming the Millennials for. Grow up.

    /*rant over*/

    Back on topic, I believe this is in retrospect very good for the consumer. If one streaming service introduces ads, and others don't - that provider will lose subs. Either because of those switching to competition, or just cancelling all together.

    If a company starts losing a mass amount of customer to a policy, they'll either change that policy or adapt. It'll (eventually) equal out, our money will delegate how they change things.
     
  7. jwdR1

    jwdR1 TS Enthusiast Posts: 26   +18

    'Show me a millennial addicted to Facebook (which definitely happens), and I'll show you a Gen X that has a perpetual problem of living in the past, and being a stubborn tool - who's also on Facebook. '

    *Looks over at my son...*

    *Deleted my FB account after the third time they wiped my privacy settings and haven't been back since.*

    ...can't argue with the stubborn tool part though. :)
     
  8. Raoul Duke

    Raoul Duke TS Guru Posts: 930   +354

    I haven't had a TV for so long I don't remember when I did. Netflix is what I use and if I have to pay to suffer through ads, I'm gone. I'd pay considerably more to stay ad free. Cost has gone up to $9.99 CAD and I think that is still absolutely incredible value. Can't really say how much more I would pay, but it is certainly lot more than $1-2, $2-3 like the survey showed was popular
     
    SultanGris likes this.
  9. Colin in tassie

    Colin in tassie TS Rookie

    I am happy to pay up to another $5 per month to keep ads out. Still very cheap viewing. We have Foxtel here in Australia and we pay $69 per month because my wife likes lifestyle and I like crime channel. A big rip off WITH ADS! So please keep Netflix the way it is and if we have to pay a little more for the experience, so be it. Just keep it ad free please
     
    gingerbill likes this.
  10. tonylukac

    tonylukac TS Evangelist Posts: 1,310   +56

    Netflix was available free rented from the library I worked at thru roku for a week. I tried it last week and first of all wonder how such a trivial amout they charge if I paid could replace all those ads. Second I would get it if it were free and had ads, different from how others seem to think here. I wouldn't buy it because it's just reruns of 1990-2015 tv shows, and I can get 1960-1980 shows over the air free, and the newest ones, so what's really the difference? There are few movies, no new batman, no new star wars, and no new lord of the rings, altho they do release new ones on it. I won't be buying it. Think of what was done to accomodate it. Net neutrality and upgrades in infrastructure. Youtube didn't require this.
     
  11. Baekhyun

    Baekhyun TS Rookie

    There are already websites where you can watch this stuff for free with ads. Why would I pay if I have to bear ads anyway?
     
  12. fktech

    fktech TS Booster Posts: 114   +34

    Fascinating discussion... When cable TV became the norm in the US this same discussion ensued: paying for cable and still seeing commercials. Over time Netflix will have to add commercials for the revenue stream to fund expansion OR raise their rates in line with cable costs. Consumers will not win this battle.
     
  13. GreenNova343

    GreenNova343 TS Member Posts: 35   +18

    As a longtime Netflix subscriber, I can honestly say that if Netflix decided to introduce ads, I would cancel my subscription. First of all, it's the one reason that I haven't signed up for Hulu yet -- you know, the other online streaming service that bills itself as the "best" way to watch current & "classic" TV shows & movies? Yeah, I use Hulu to keep up on the literal handful of TV shows that I actually watch, & I put up with watching the (very) repetitive ads because I'm not paying for it. But paying for access & still having to suffer through commercials? Sorry, no dice.

    However, I would strongly disagree that Netflix will "have" to even consider putting ads into the mix. On my Roku, I have probably 10-20 other "movie" channels currently installed. Most of them are either niche (mostly horror), have a lot of "older" movies (as in movies that were already "old" when I saw them as a kid), or are part of the vast direct-to-video portion of the cinematic universe (what my wife & I like to call "Syfy Specials"). In *every* single case, the channels are free, but you have to be willing to sit through a break of 3-5 commercials every 15-20 minutes (usually the same ones each break, sometimes the same commercial 3 times in a row). They do, however, offer an option on these channels where you can essentially "rent" the movie for a small charge (between $0.99 and $3.99, depending on the movie and/or channel) to watch it commercial-free. None of them, of course, have the available library that Netflix has, nor the kind of contractual leverage that it can bring, so I don't see Netflix having any kind of revenue issues. Heck, when they raised the rates for new subscribers 2 years ago, they were able to delay applying the rate hike to current subscribers (like me). That right there either means they actually do understand what their customers want (something very rare in the industry), or they were bringing in so much revenue that they could afford a lower increase in their revenue stream to avoid driving the existing customers away.
     
  14. OcelotRex

    OcelotRex TS Addict Posts: 135   +57

    I've had the streaming service since it debuted (for free with your DVD subscription) and I wouldn't mind ads assuming that the price decreased or the content increased. I already pay for the $12 + tax for 4 streams and UHD though streams are more important to me than UHD content since I only own 1080p TVs.

    If Ads are essential to the model I'll live with it since Netflix and Prime Video are our sole source of "TV" watching excluding live TV OTA. I think Netflix will think of something more creative for their long-term customers like they did with preserving the $7.99 price for 2 years.
     
  15. Trillionsin

    Trillionsin TS Evangelist Posts: 1,316   +133

    LOLWUT
     
  16. Trillionsin

    Trillionsin TS Evangelist Posts: 1,316   +133

    Seconded. +1
     
  17. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,750   +1,105

    Hey Netflix - I've heard PirateBay has ad-free viewing.

    JustSayin'
     
  18. Hexic

    Hexic TS Addict Posts: 283   +132

    You Aussies get screwed on rates there, man.. that sucks. I feel for ya. :|
     
  19. SultanGris

    SultanGris TS Booster Posts: 158

    I'd definitely cancel if there are ads, back to torrents for content. I'd pay a bit more to keep it ad free though, it's ridiculously cheap now compared to cable which sucks cause it's full of ads and I don't have it. I'd pay $4+ more easily.
     
  20. Mark Stevens

    Mark Stevens TS Rookie

    You can pay extra to get hulu ad free, I have Netflix and hulu and amazon prime and they are all ad free, but I do pay extra to have the ad free service, but it is worth it, because I will not watch the ads.
     
  21. bobc4012

    bobc4012 TS Enthusiast Posts: 50   +27

    Unfortunately, I think you are right. Whenever consumers figure out a way to get things for free or cheaper, the producers will figure out a way to overcome it.
     
  22. Phr3d

    Phr3d TS Booster Posts: 240   +43

    As Netflix is a very powerful presence, I can -imagine- a model that would charge Superbowl fees for a not-more-than-15-second ad that will appear once at logon, or once per return to main page.. IF we could trust Hastings to actually give a shyt about his customers, I could take a Short, well produced ad from a self-respecting company if it added to Netflix' coffers and produced additional good content.

    Unfortunately, the one-and-done ad market died (companies used to pay for entire 'movies with limited advertising' as they recognized the value of that captured audience) Obviously the brilliant marketing types successfully (marketed) argued Against this, and Cheap, Cringeworthy, Useless, Nauseating advertising won.
     
  23. Victor38077

    Victor38077 TS Rookie Posts: 22

    I would definitely cancel. I pay good money to have a commercial-free experience. If Netflix introduces commercials, I will cancel and stick with vudu instead. I already have 100 movies in my digital collection.
     
  24. 3ogdy

    3ogdy TS Rookie

    I'd rather have the ad creator get serious cancer than view ads. Imagine that!
     
  25. Nebulous

    Nebulous TS Rookie

    I hate ads myself. I wouldn't mind paying another $2 for being ad-free. You already get so much content to watch and its like $8 a month (I think).

    Actually I am using a friends Netflix account so its free for me. :p
     

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