Adding Commercials Would Cost Netflix 57% of Subscribers, Claims Study
A new U.K. study claims Netflix could stand to lose a majority of its subscribers if the service decides to ad commercial breaks to its shows. When it comes to the world of subscription streaming services, Netflix is clearly the top dog, both within the U.S. and worldwide. That makes sense, as Netflix basically invented the subscription streaming model in the mid-2000s, back when one could only stream in standard definition, hours were limited per month, and it came as an add-on to one's DVD rental subscription.
Netflix recently revealed that its worldwide subscriber count has expanded to an all-time high of nearly 140 million users, even more than the company had previously forecast. Around the same time, Netflix announced that it was set to raise prices on all plans in the U.S., which was predictably received with annoyance by most. That said, it doesn't seem like this latest increase will hurt Netflix much more than prior ones, which is to say it'll likely have little negative effect on Netflix's bottom line. After all, what Netflix offers remains a bargain, even at the latest rates.
Over the last few years, there's been the occasional rumblings that Netflix planned to ad commercials to its service. There's even been some testing of short ads before and after shows, although they were just for Netflix programs, and weren't shown to all users. Needless to say, Netflix has yet to officially roll out any type of advertising breaks, and if the result of a recent U.K. study by the firm Audience Project is to be believed, Netflix would be wise to maintain that stance. As reported by Net Imperative (via Screen Crush), 57% of subscribers surveyed say they would cancel their Netflix service if commercials were added.
While the study cited above was conducted in the U.K., and only surveyed U.K. Netflix subscribers, it's not hard to imagine that the results would be similar (if not even more distressing) in other large western markets such as the U.S and Canada. In the age of streaming and DVRs, viewers have been conditioned to rarely having to deal with commercial breaks, and once someone gets used to ads being gone, it can be very hard to adjust to the idea of forced interruptions being a thing again. Every major streaming service is commercial-free (or offers a commercial-free tier like Hulu and CBS All Access), and people like them that way.
The funniest aspect of this whole situation might be that if the study's results are accurate, Netflix kind of has itself to blame for setting the expectation that streaming comes without ads. They were the innovators of the industry, and have been sans-commercials since the beginning. It's no wonder why users would balk at the idea of watching ads, especially when the price of the Netflix service is unlikely to ever go in a downward direction.