Netflix could lose a significant amount of subscribers if it introduces adverts during its programming.
Hub Entertainment Research questioned 1,612 US TV consumers from ages 16 to 74 who watch at least an hour of TV per week and have broadband at home.
Their report found that almost 25 per cent of respondents said they would stop using the streaming service if it began running ads during Netflix content. Netflix currently has 130 million subscribers worldwide,
Asked if they would still use Netflix if it reduced the price of a monthly subscription to $3 a month as part of including ads on the service, 16 per cent of those surveyed said they would still cancel their Netflix subscription. Half of the respondents said they would probably stay with the service under the hypothetical scenario, and 25 per cent said they definitely would keep it.
“I think there are ways that they could arrange it so they retain as many customers as possible, but I think if they add ads at all, even at price reduction, there will be some people who leave,” Jon Giegengack, author of the report, said. “The question is, do the economics work out for them?”
Hub also examined how high Netflix could raise its monthly fees for its current ad-free offering before it would begin to lose subscribers.
A basic Netflix subscription in the US starts at $7.99 per month. If Netflix raised its monthly fee by $2, only eight per cent of the respondents said they would cancel. If Netflix increased by $5 per month, 23 per cent said they would stop using the streamer, and if it raised prices by $10 more per month, 28 per cent said they would cancel.
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