Netflix Could Lose a Quarter of its Subscribers if it Shows Ads, Study Finds

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Netflix Could Lose a Quarter of its Subscribers if it Shows Ads, Study Finds

One of the key features of Netflix’s unlimited streaming platform has always been the absence of traditional TV advertising. You don’t have to watch commercials in between segments of Stranger Things or The Great British Baking Show, and this is a boon for just about everybody—and an integral part of the user experience.

However, Netflix has recently begun some experiments in how it could eventually add more advertising to the service, putting short promos for other Netflix series on certain shows. The company describes this practice as “testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster,” but it’s pretty obvious that the true goal is to dip a toe into the waters of advertising and see just how much it pisses customers off.

As it turns out, the answer seems to be “quite a bit.” According to a newly published study by Hub, approximately 23 percent of Netflix customer base say they’d unsubscribe immediately if the service started featuring ads. 41 percent of existing customers said they’d “definitely or probably” keep their subscription, while a looming 37 percent remained undecided. Any way you slice it, that’s a whole lot of potential cancellations that could happen practically overnight—we’re talking millions and millions of subscribers here, to the country’s largest streaming service.

The Hub data comes from a study of 1,612 U.S. TV viewers between the ages of 16-74, which is a good slice of the average Netflix viewing population. It assumes no other changes to the Netflix service such as price, which had its own questions that were asked separately. For instance, if the subscription rate to Netflix was lowered by $3 per month with the addition of traditional advertising, only 16 percent of the participants of the study said they would still cancel their subscriptions—still a very substantial number.

Of course, the most likely scenario might be Netflix simply mimicking what other competitors such as Hulu have already done, by breaking its service into a “regular” and “premium” subset, the more expensive of which is ad-free. Here’s hoping that if this happens, it isn’t paired with a worldwide price structure increase.

One thing is for certain: If Netflix decides to start showing ads out of the blue, they’ll be struck by a consumer backlash the likes of which the internet has rarely ever witnessed.