Netflix could stand to lose three-quarters of its subscriber base if it starts showing advertisements during shows, a customer study has suggested. In a survey of 1,200 people on Reddit, 74% said they would cancel their subscription if Netflix adopted an ad-supported model.
Netflix is no longer the undisputed king of video streaming services. The arrival of comparably strong offerings from the likes of Amazon and Now TV has loosened the company's stranglehold on the video-on-demand market, and made acquiring licensing deals more expensive. This makes it harder for Netflix to make a profit from its service, resulting in a shrinking content catalogue and higher membership prices for customers.
The alternative to raising the cost of a membership is running ads, an approach that has been adopted by Sky Go and US streaming service Hulu. Yet in a survey of Netflix customers by AllFlicks, the majority of respondents said they would walk away from the service entirely if it followed suit.
At the same time, 9 out of 10 respondents said they would rather pay more for their Netflix subscription than see ads during a stream. "The results were overwhelming" said AllFlicks. "Of our more than 1,200 respondents, an incredible 90% said they'd prefer a price hike to ads.
"That must gel well with Netflix's own internal findings, since they've repeatedly chosen to up their prices rather than go for ads."
That said, customers purse-strings remain tight. Less than 15% said they would be willing to pay $4 (£2.70, €3.50) or more to keep Netflix ad-free, and only 22% said they would be willing to pay between $2 and $3. According to AllFlicks, the "sweet-spot" appears to be $1-2, which 57% of respondents said would be the most they would be willing to pay for an ad-fee streaming experience.
Anyone familiar with Reddit will know what a firestorm it can be, meaning there's no way of telling whether those surveyed would follow through with their threats, or whether more official, in-depth surveys would throw up the same results. Still, there's no doubt that some users would be willing to wave goodbye to an ad-supported Netflix, and with so many alternative streaming services to choose from, it wouldn't be hard to do so.