According to a new report, Netflix could face a considerable loss in a number of subscribers, if it displays ads on its streaming service.
According to streaming media, Netflix would suffer a loss of twenty-three per cent of its subscribers if they start running ads on its running price or a dollar cheaper. That percentage will point to almost 14 million Netflix subscribers out of 60 million paid Netflix subscribers in the US.
Netflix subscribers could have forgiven it if Netflix dropped prices. 14% of Netflix subscribers replied that they might withdraw their Netflix subscription if a price drops by $2 from the current price and it was shifted to $3 discount if it drops to 12%.
This study was based on the survey of 1,765 US TV customers who lie in an age range of 16 to 74 who pays interest in watching a TV for at least an hour a week and have broadband in their home.
According to Hub study, advertising insiders suppose Netflix, in the long run, will make advertising as its core part. Joshua Lowcock of media agency UM, at a panel during IAB’s Digital Content NewFronts in April, said he ”can’t picture a world where Netflix will be free from ads permanently”.
Generally, Netflix doesn’t show ads, but sometimes, it shows product ads in popular shows. In response, Netflix said to CNBC in sporadic cases; they add paid ads sometimes from the request of show creators to help the third parties product placements.
Netflix recently declared an increase in its price plans in January to increase quality by increasing HD standard plan from $11 to $13. Netflix tried to improve Netflix subscription rates to fuel its cash burns. Previously, Netflix used to manage advertising to clear its costs. In a 2015 interview, Netflix CEO Reed Hastings said,” Our concentrate and our expertise is really in commercial-free”.
Netflix’s increasing list of streaming rivals which includes Hulu and Comcast’s NBC Universal is developing ad-supported models with a portent that Netflix will ultimately support ads as well.