As per a new report, Netflix’s plans to introduce advertising to its service can result in the loss of a substantial amount of its subscribers. Results of a recent Hub Entertainment Research Survey shows that 23% of the respondents told, they would stop subscribing to Netflix, if it starts streaming advertisements, at the current rate of subscription or even if they make it a dollar cheaper. That means Netflix would lose almost 14 million subscribers from the base of 60 million, which it enjoys in the US.
However, they were in favor of retaining Netflix, in spite of the introduction of the ads, only if it dropped prices. For instance, 14% told that they will surely or may drop even if the subscription fees were $2 cheaper than what it is at present. 12% said they would drop in case of $3.00 drop.
The study involved 1,765 US viewers from the age group of 16 to 74, who watch television for at least an hour in a week and have a broadband connection at their home.
At present, Netflix does not run any advertisement, though products of various types do pop up during the streaming of popular shows. As per the reports that Netflix revealed to CNBC, it does not accept any paid placement, though there are times when various famous brands pay to a third party, for placement of their products during the streaming, often at the behest of the makers of the shows.
Netflix has in the past, thwarted any use of advertising to offset its expenses. CEO of Netflix, Reed Hastings had told in an interview way back in 2015 to Reuters that the focus and the expertise of the company are entirely free of commercials.
Of late, Netflix is facing stiff competition from streaming rivals like Hulu and NBC Universal from Comcast. The later is coming up with ad-supported models, which may lure Netflix, to go for ads as well, subsequently.
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