Netflix is among the most popular Video On Demand (VoD) service that streams movies and series to millions of users worldwide today. However, about 23% of the subscribers are not happy with the decision of the service provider to add commercials in between the streaming content.
According to a survey conducted by Hub Entertainment Research, about 23% of the current subscribers would most probably drop Netflix if they would be forced to see the ads in between their favourite videos, at the price they are paying so far. Again, 41% of the subscribers don’t have any issue even if they get to see the ads. Rest of the subscribers was on a ‘Can’t Say’ mode in this matter.
Ads on Netflix: The Bone of Contention
The prominent filmmaking companies such as Walt Disney Co. and NBCUniversal are about to enter into this business soon. So, to stand ahead in the competition, Netflix is borrowing a considerable amount of money for their programming and other technical aspects. However, to keep its revenue book strong, Netflix is reportedly considering to monetize its traffic through ads.
The company is reportedly in talks with few of the largest digital advertising networks to crack a better deal for showing ads in the middle of content that gets streams to paying customers.
To the contrary, a majority of Netflix customers are finding it quite annoying considering the fact that they are already being charged for the content with uninterrupted experience.
Lowering down the prices can be a good deal for Netflix:
It would be wise to cut down the subscription costs for Netflix by $2 to $3 per month. Eventually, if it happens, and if the monthly subscription is brought down to $2, about 52% of the subscribers will continue with Netflix, and 14% of the subscribers would drop the service.
Another practical option for Netflix would be launching a dedicated ad-free version charging less than a dollar per month. In this case, Netflix can retain around 60% of its current subscribers, as they would select the ad-free version. In case, if the cost is set to $3, obviously, more subscribers would prefer ad-supported version than the ad-free one.
“The viewers would prefer better Return on Investment (ROI) when they are spending their valuable time in watching ads. The return on their part could be a substantial decrease in the price they pay to stay with Netflix,” says Peter Fondulas, who lead this survey.
It is important to note that Netflix has recently increased their monthly subscription charges in the US and the customers are already burdened with price-hike. The price-hike was justified by Netflix as inevitable to keep the experience rich and uninterrupted. Undoubtedly, such a move could be considered as a betrayal by many customers and an adverse impact on the market share of Netflix.
This data was collected in June 2019, from Hub’s Monetization of Video Study, through 1,765 broadband users in the U.S. that spend around 1 hour each week watching TV.