July 8, 2019
Netflix has steadfastly refused to insert third-party advertising in programming as Hulu does on its basic subscription plan.
New data from Hub Entertainment Research contends the SVOD behemoth could lose 23% of its subscribers if it added advertising, according to a June survey of 1,765 U.S. broadband consumers. About 41% of respondents said they would keep Netflix.
The SVOD pioneer ended its most-recent fiscal period with nearly 150 subscribers worldwide, including more than 50 million in the United States.
Hub found more receptive respondents to ads on Netflix if the service also lowered the monthly subscription plan pricing. About 33% of respondents said they would accept ads if their monthly plan decreased by $1.
The percentage of ad converts increased when the monthly fee dropped by $2 or more with 53% saying they would keep Netflix and 14% saying they would not.
“The success of any Netflix ad-supported plan — whether to replace or add to its current offering — will naturally depend on whether consumers feel they’re getting a sufficient price-break return on their ad-viewing investment,” Peter Fondulas, analyst and co-author of the study, said in a statement. “But one thing is clear from these results: after one increase already in 2019, any attempt by Netflix to use an ad-supported plan as a reason to hike its ad-free price again could seriously backfire.”