New study shows over half of Netflix customers would cancel if it had ads

Cal Jeffrey

TS Evangelist
Staff member

Back in August of last year, ads began showing up between episodes of popular televisions series’ on Netflix. The commercials were self-promotional spots for other Netflix content, and at least some users reported that they could not be skipped.

Netflix claimed that it was a test conducted to understand how to better direct people to shows they may want to watch. It denied that the promos were “unskippable,” but regardless, the test did not go over very well. Many threatened to cancel their subscriptions if the ads didn’t go away.

A recent survey of Netflix subscribers conducted in seven different countries shows that those threatened cancellations could have added up to a tremendous loss for Netflix.

“Netflix’s leading position on the streaming market is clear proof that its strategy of focusing on growth through investment in content rather than hosting ads has been right,” says market research firm AudienceProject, which conducted the study. “When asked whether the Netflix users would stop watching content on Netflix if the company were to add commercials into its streaming service, more than half – and in some countries up to two thirds – confirm that they would do this.”

Even when presenting users with a scenario where Netflix lowered the subscription price while introducing ads, around half still confirm that it would make them stop watching Netflix.

Denmark was the least tolerant with 69 percent of respondents saying they would cancel. The US held the low with only 54 percent walking away angry.

Perhaps even more interesting are how people reacted to the possibility of having lower subscription rates in exchange for a few ads. The numbers as expected were reduced, but not by much. Sweden was at the high end with 57 percent saying they would pull out even if Netflix lowered their prices. Finland was the most willing to entertain the model switch with only 37 percent saying they would quit despite the lower rates.

Fortunately for subscribers, Netflix’s trial of between-episode ads is over, and so far as anybody knows, it has no interest in switching to an ad-based model or even bringing back the content-related interruptions (skippable or otherwise) again.

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Eldritch

TS Addict
Put up an free version with Ads. Put ads every 15, 10 and 7 minutes for SD, HD and 4K which will be interruption enough for paying consumers to not consider shifting while it will attract people who would have otherwise Torrented the shows.
 

seeprime

TS Guru
This should send a message to Hulu also. They could probably double their subscribers and make more money if they would just dump the ads.
Hulu has a no commercials subscription for $12 per month. We went right to it so we could watch 4 "one hour" shows in three hours. It makes no sense to pay for ads, even if it saves a few bucks a month.
 
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Reactions: Uncle Al
There's a big difference between the occasional "here's a promo for an upcoming/available Netflix original that we a) would like our viewers to watch to justify the money we spent producing it, or b) think that you might be interested in based on your other viewing preferences" -- which are also seen (& much more frequently) on Amazon's Prime Video -- than the "here's an ad that you can also see on broadcast TV or most cable networks every 10-15 minutes & between every show, because we have to make money from ad revenues in addition to our monthly charges (if we even have any)". The former, I can not only live with, but I'm all for; the latter, yeah, that would make me seriously rethink my Netflix subscription.

Although, if they decide to go the latter course, I would hope they take a page from Vudu (which, in addition to storing the digital copies of your Ultraviolet & other movies you get when you buy certain DVDs or just buy on their own, also has a huge library of movies that are "free with ads"), as they have ad breaks every 15 minutes but only show one ad (unlike other services that can show 3 to 5), and show a different ad each break (again, unlike some other services, *cough* Roku Channel *cough* where 3 of the 5 ads will not only be identical but will show one right after the other).
 
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XtremeHammond

TS Addict
Only for a F2P streaming, I think.
Otherwise, increasing subscription price and adding ads will definitely create some space for competitors.
 

Uncle Al

TS Evangelist
I'm still a proponent of TV being like it was when it was broadcast. If you're going to feed me Ads, the service should remain free of charge. The company that figures that out again will dominate the industry and when you look at the breakdown of revenues, all of them could easily do it .....
 

Hexic

TS Evangelist
Yup, either free service w/ adds, or I'm hoisting the sails if they begin throwing ads in my *paid* service. That's why I pay for other related services, to remove those ads and support the company in the process.

There are alternative measures to get media that I'm more than willing to take the time to pursue once more, if it comes down to brass tacks.
 

Plutoisaplanet

TS Addict
Put up an free version with Ads. Put ads every 15, 10 and 7 minutes for SD, HD and 4K which will be interruption enough for paying consumers to not consider shifting while it will attract people who would have otherwise Torrented the shows.
I would use a free, ad-supported version of Hulu... In addition to Netflix. I won’t pay for multiple streaming services but obviously Netflix doesn’t have everything so I don’t mind watching ads once in a while for additional content.
 
S

senketsu

If Netflix does this I am also gone.
I went to Netflix to get away from inane TV shows and to be able to see ad free movies. As Netflix fills up with more popular to failed TV series and Netflix originals I'm losing interest.
as @Sausagemeat pointed out, if they can make more money from ads than the lost subscribers, they will certainly go that way, plus I know my one cancellation won't change Netflix, but it will be good for me and that's enough. No anger, just time to move on.
 

mctommy

TS Guru
Here is my middle finger to Netflix if they ever did this. There is a reason why I don't have Hulu... EFF those ads!!! I've been annoyed by youtube recently because of all the ads.
 

willhen50

TS Rookie
Problem is NetFlix has gone into movie production and have high paid actors on payroll. Who knows how much they are paying the Obama's. Even where NetFlix is offered for free, I decline because NetFlix is promoting them ad nauseam.