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Netflix 'Would Lose 57 Percent of Their Subscribers If They Added Commercials' (netimperative.com)
According to new research from marketing technology firm Audience Project, the majority (57%) of UK customers would stop watching Netflix if commercials were introduced, and even lowering subscriptions would cause a significant drop off of 42%. Here are some of the other key findings: - In the UK, Netflix takes the lion's share of the streaming audience at 70%, followed by BBC iPlayer (61%). Interestingly, YouTube, ITV Player and All4, all of which host ads, saw a decline.
- TV is still the preferred streaming device in the UK used by 42% of respondents.
- Streaming is on the rise particularly amongst the young, with almost as many 15-25 year olds streaming/downloading (63%) as watching traditional TV (65%) "This is proof, if it were needed, that Netflix is right to focus on growing through its investment in content rather than considering hosting advertising any time soon," Netimperative reports.
Martyn Bentley, Commercial Director UK at Audience Project, comments: "Our findings highlight the growing importance of targeting and relevance in advertising. As consumers have increasing choice over whether or not they see ads, both broadcasters and advertisers alike need to work hard to ensure that campaigns enhance experience, rather than detract -- plus it suggests that greater inroads need to be made with Connected TV as a means to help tailor advertising at a granular level."
- TV is still the preferred streaming device in the UK used by 42% of respondents.
- Streaming is on the rise particularly amongst the young, with almost as many 15-25 year olds streaming/downloading (63%) as watching traditional TV (65%) "This is proof, if it were needed, that Netflix is right to focus on growing through its investment in content rather than considering hosting advertising any time soon," Netimperative reports.
Martyn Bentley, Commercial Director UK at Audience Project, comments: "Our findings highlight the growing importance of targeting and relevance in advertising. As consumers have increasing choice over whether or not they see ads, both broadcasters and advertisers alike need to work hard to ensure that campaigns enhance experience, rather than detract -- plus it suggests that greater inroads need to be made with Connected TV as a means to help tailor advertising at a granular level."
If Youtube had ads their viewership would drop a lot too.
I'd go $2/month.
You are welcome on my lawn.
it's not 57% it's 56.732%. Let's keep this discussion rooted in reality people.
Some drink at the fountain of knowledge. Others just gargle.
The interesting question is not whether a large portion of their existing subscribers would bail with commercials. That goes without saying. Even if they cut the price massively, one of the major reasons for paying for Netflix is the ability to get good content without commercials, and they know this.
Rather, the interesting questions is whether a lower-cost or free ad-subsidized tier would bring in enough additional subscribers to offset the loss from subscribers in the ad-free tier switching to that ad-subsidized tier.
Check out my sci-fi/humor trilogy at PatriotsBooks.
According to my pihole setup - youtube doesn't have ads :)
No, the findings highlight the fact that consumers don't want advertising. Anyone other than a marketing droid would see this as declining importance of ads. Talk about cognitive dissonnance.
I refuse to pay twice. That's why I have never given Hulu a cent. I don't care how great the shows are, or how much my kids will kick and scream.
They lose 100% of my attention when ads are on anyway.
Step 1. Mute.
Step 2. Look away or look at another device.
Step 3. (Optional) Consider how I could acquire the same content with no ads, any means necessary.
Why the actual fuck are you going to PAY every month for something like Netflix if you're still going to be subjected to commercials? It would make zero sense. if they want to add commercials then they should charge ZERO dollars per month. If you PAY for it then you should get ZERO commercials, plain and simple. If they're not making enough money then raise the damned subscription fee. Otherwise why bother? Just put an antenna on your roof at that point and pay nothing anyway, record everything on a DVR, and skip past the commercials.
I would drop as well. I would rather they increase their fees by another few bucks, or better yet just offer a close to free option with commercials
Shock. Perhaps it has something to do with the ITV player hosting almost no programs that are not either 1. "Reality TV" 2. Old or 3. Very old. As for Ch4, they have turned their Roku interface to sh*t. Much more difficult to find anything now. I can only think that the people who design the UI never actually use it themselves.
The real "Libtards" are the Libertarians!
This makes me wonder if advertising, on video media, runs a risk of dying out.
Youtube is now offering an ad free subscription.
If NetFlix has such a large chunk of the viewing population then where can you get your product videos into eye balls?
Facebook? Not everyone uses it and you can ignore most things there.
How long until Facebook offers an ad free subscription or does it capitalise on the other channels shutting up shop?
It's not like NetFlix customers don't have an alternative as an en masse return to piracy could be one public backlash,
A balance must be maintained.
This is an interesting study as it raises a lot of questions about the future of screen viewing and advertising's place in it - if at all.
Unless you barely watch it, how little is your time worth to you to even consider it? You're paying $10 a month less, but if you watch about 4 hours of content, you'll wind up having to sit through about a hour of commercials if the streaming service uses the same ratio that television does.
I don't understand what all this hate is about commercials. Without them, I'd never have seen the Geiko Gekko story. And they brought back the Caveman episodes, gloriously spread across my 72" screen!
Regards,
your local insurance salesman
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
I wonder what TV/radio/etc is like in those special places around the world where that is not common or allowed?
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
When cable TV first came out one of the selling points was, you are paying up-front so there will be no commercials! Now you can watch maybe five minutes of cable TV without getting a commercial - and people are fleeing. One of the absolute best things about Netflix is the lack of commercials. They have already shown that people will in fact pay up front to avoid commercials. It will be too bad if they submit to the easy route and add commercials, dooming themselves to irrelevance.
+1 having commercials on a paid service is annoying... I will pay for content that is friendly to me, or I will tolerate commercials on a free service (within limits -- when it's too much I just close it), but I won't pay to see commercials.
They just have to decide how they make more profits. I don't have to be their customer, and I don't care which way they go. I think the headline is right though. If they add commercials and still charge me monthly, I'll cancel.
How about free? Or perhaps they can pay people to watch ads.
. . . if you watch about 4 hours of content, you'll wind up having to sit through about a hour of commercials if the streaming service uses the same ratio that television does.
Who says you have to sit there and watch the commercials?
As you suggested, it definitely depends on how much. A five-second ad before the show, or at the end, is a lot different than a two-minute interruption in the middle of the show.
I'm sure a lot of people would rather pay less and have ads. The fact that most YouTube viewers choose ads over paying $10 is evidence of that. The cool thing about streaming vs broadcasting is that different viewers can have a different experience. Some can choose free with ads, others can choose to pay monthly. Different bitrates / quality are available, and a small reduction in quality can significantly reduce bandwidth / costs (including hardware throughput etc.)
Personally, I'd much rather see a short ad for a new Raspberry Pi shield or budget 3D printer than a Massengil ad, and streaming allows for users to see ads that might actually interest them. I might personally prefer relevant ads of interest to me over paying cash.
I'd say the frequency at which there are commercial interruptions and the duration of them matter too.
Most people would stay, even those that say they would leave. Business know this, it's why the quality of so many things is dropping.
Not sure whether this varies by region, but Hulu has an ad-free option for $11.99/month.
I find it good value for money:
1) Saves time not having ads ... cliff-hanger before ad-break is resolved when show continues ~1 second later.
2) Saves frustration
You know, you're absolutely right. If network television could thrive for decades by giving people free programming paid for via commercials, so can Netflix.
So forget it. Netflix. If you add commercials, it better be gratis.
You are welcome on my lawn.
You don't, but then you need to find something to do for two minutes and dick with rewinding the stream when you miss part of it because you took longer than the exact amount of time that the commercial break ran for. Even if you're working minimum wage, the time wasted on commercials probably isn't worth your time if you consume enough content.
If I ever see a single ad on Netflix I will immediately end my subscription.
My favorite commercials are those Lincoln ads with Matthew McConaughey, where he plays a man who is slowly going insane. Ever since I realized that's what was going on, I can see that's the only interpretation that makes sense.
You are welcome on my lawn.
Netflix could create a lower priced tier with commercials. It could start at $5 a month for 1 concurrent stream for extremely price sensitive customers.
They'd be better off giving those users only a subset of content (no TV series or something). Netflix's brand is super-convenient no commercials, adding a commercial tier just kills their brand identity for a pittance of money.
I stole this Sig
+1. What I REALLY hate about Comcast is not that it has commercials, but that, in many cases, I can't skip the commercials. I've already paid for the content with my out-effing-rageous monthly fee, now I have to pay again with my time.
The Russians have won. They have made the world a cesspool of distrust, greed, fear and hate.
Reminds me of when I signed up for a trial week of Hulu, not knowing anything about it other than that it was a competitor to NetFlix. First day, when I saw a commercial in the the middle of a show, my jaw dropped nearly to the floor. I didn't need the next six days to try it out. Cancelled it on the first day during the trial period.
If I'm paying for a service, I'd expect it to not have any commercials. Like another poster said above, I wouldn't even use the service if they paid me $5 or $10 per month. That's how much I hate commercials.
Which brings me to my beef with commercials. There are people who commercials work on. Then there are people who see commercials as a nuisance, since not matter how much they'd try to sell me something, I wouldn't be interested in buying it. It's like walking into a car dealership so you can test drive a car to compare it to other cars you're going to test drive. Some people buckle to the pressure sales. Me? There's no way you can convince me on the spot that I should buy that car. I would be taking my time and doing my homework. By the time I walk into a dealership and ask to buy a car, they wouldn't have to convince me at all, because I've already done my homework.
Commercials are the same way. I'm not going to buy a Sony stereo because I saw it in a commercial. I'm not going to fly United because I like George Gershwin. For people like me, a service that would be commercial free is the best bet for the streaming companies to keep us as customers.
Is that a roll of dimes in your pocket or are you happy to see me?
It's impossible to paused when browsing their content without some preview automatically launching.
Netflix have what you or I would be told is not a business model if we went to the bank: sell everything you have at a loss. Same as Uber, the only way it works is if you drive everyone else out of business before you run out of cash. That's just not going to happen.
So, obviously, they need to find some way of making this pay and if advertising is their answer then instantly they become old media delivered over new pipes.
I'm sure none of the people who were in at the ground floor care about any of this; they'll be long gone by the time Netflix is bought at a knock-down price by Amazon who, you know, actually have a profitable business (AWS) to cross-subsidise the losses with.
"Encyclopedia" is to "Wikipedia" what "Library" is to "Some people at a bus stop"
Netflix could create a lower priced tier with commercials. It could start at $5 a month for 1 concurrent stream for extremely price sensitive customers.
They can either charge or subscription or have ads. Mixing the two is a bad idea.
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
Once withdrawal symptoms settle in if there is no meaningful competition for Netflix a large percentage of the people would gnash their teeth and rejoin lest their brains leak out or something. I have seen this pattern before. Most anybody old enough has.
{^_-}
This could be a moment similar to one all successful companies hit sooner or later - the point where they have saturated their market.
Netflix has seen incredible growth, likely a lot of it from signing on new clients. But the problem is, they have allowed the stock market to believe that this sort of growth is sustainable, when everything we know about markets tells us that this isn't possible. So it's possible that this is Netflix floating the idea to see how people react, for example by analyzing trending social media comments.
For existing NetFlix subscribers, I suspect the best thing to do is be very vocal that this would be a deal-breaker for you. If enough people make that view clear, I'm pretty sure they will reconsider, primarily because a flattening of the revenue curve is better than a precipitous drop. Remember folks: actions speak louder than words.
Speaking of insurance, Dutch insurer Centraal Beheer made some rather funny ads. These were the sort of advertisements talked about at the water cooler, and shared with friends on YouTube. The kind of ads that people watch voluntarily... but even so, they still suck when they interrupt a movie or TV show.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
How the hell does advertising enhance programming? It always detracts.
I used to subscribe to a film channel in the UK called FilmFour. They mainly showed independent, British and foreign cinema, not films made through Hollywood studios.
They stopped charging for subscription and started to include adverts to try and boost viewer numbers. I saved on my subscription and stopped watching.
I don't want adverts. I especially don't want adverts midway through a film. If Netflix start doing that I'll revert to film sources that let me watch a film, not watch a third of a film then completely destroy any narrative, mood or tension its created by imposing shitty fucking adverts on me.
The other factor of course is that British people are used to watching BBC channels which never interrupt shows (or films) with adverts. We're not conditioned to accept the ubiquitous and abusive advertising practices that make American television so unwatchable.
Correct! I also pay the $11.99 to skip the ads. It works and does have good value. We dropped our NetFlix subscription in October due to having objections to some of their original content.
In the UK, commercial TV = free.
The BBC is accessed through the TV licence so it is pay-to-watch (about $16.50 per month) but has no commercials. The licence covers a household i.e. a house and its occupants regarded as a unit, regardless of size. It also covers the cost of BBC radio although you only need a licence if you are watching the TV.
So, the expectation of the consumer would be to provide Netflix for free with ads or for a fee without ads. It would be a bitter pill to swallow to pay for a service AND have ads, particularly so if ad breaks appeared in films.
The major difference is that the ITV hub is streaming only, while iPlayer allows downloads. And lots of people are watching TV while travelling, where your internet connection is either very expensive, very slow, or if you are underground, non existing.
With iPlayer I have a reasonably good choice of TV series that I can download at home with a good internet connection and watch on the train for free, and movies can usually be downloaded for a week.
Being advert free is nice, but other factors are much stronger in favour of iPlayer.
The day the even consider that possibility is the day I ditch them.
I don't understand what all this hate is about commercials. Without them, I'd never have seen the Geiko Gekko story. And they brought back the Caveman episodes, gloriously spread across my 72" screen!
Regards, your local insurance salesman
Don't forget catheter ads for men, and the sexualized adult diapers for women.
Or the mesothelioma lawyer fishing expeditions. Maybe if the ads weren't tending toward so damn gross?
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Just the mixing of included with Prime and "buy now" on Amazon is highly detracting to me on Prime. I left cable to escape the constant barrage of brain damaging commercials. Netflix is the only refuge. Even DVD's sometimes have commercials.
Netflix's big price hikes are also a bad way to go. They could, instead, add a broader mix of titles for higher prices. That would earn them more money without pissing off their existing customers. It's really sad if they are thinking that the lack of commercial free alternatives enables them to make sudden big price hikes. It's utterly absurd to think they are going to add commercials and stay in business.
The ultimate and best solution by far would be a free and open mesh network for streamed moves, not controlled by any one company. That is, studios could market their movies and series over this mesh network directly to customers. Customer could pay for each, individually, or build a rationing plan. Movie rationing would work like this:
1. Decide how much you want to pay, per week (unlike months, a week is always exactly 7 days).
2. Select filtering criteria (e.g. percentage for each genre, minimum ratings, etc).
3. As each payment is received, a new selection is made (as far as the rental prices fall within your monthly payment), excluding those you've already watched (unless you mark to specifically keep).
You'd have a true free market in movies with earnings going directly to the studios that produce or own them -- no overhead loss, either increasing their ability to produce and/or reduces your prices to watch them. Also, free movies could be unlimited.
Customers have far more power and choice... freedom. Everybody wins except for middlemen.
Similar to IFC (Independent Film Channel), they used to be ad-free during the content, but not anymore. I don't even think they are uncut/unedited anymore, either.
...
Lowering subscriptions would cause us to run away!?
damn straight! (I know - score 0 but I gotta say it.)
Back in the day, the FCC *mandated* a limit for the amount of time/hour for commercials. Like, 5 min or was it 7 min PER HOUR.
Then, when cable started coming in in the late seventies and early eighties, what they *advertised* was "pay for cable, and you'll never have to watch commercials again".
Yes, for real. Meanwhile, the last time I watched an hour show on cable, it was 22 min/hour of commercials.
Obviously that kind of thing differs by channel. Fox shows a lot of ads targeted at old people, for example, for obvious reasons. Although I had Fox headline news on my radio the other day and was surprised to hear one of their normal "invest all your money here" ads, except it was promoting marijuana.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
Wait, what? I've flown as much as anyone, but have never seen this. Is there seriously an airline this shitty?
Netflix could experiment with digital product placement, just like they are producing Interactive movies and series. This 4 page paper is an introduction to this topic: https://www.academia.edu/12616... If they use state of art technology, Netflix could sell a lot of Ads and product placement without annoying their paying customers.
I'm secretly hoping that they do flood Netflix with ads, so that another competitor can gain traction. Hopefully said competitor won't fire their long-term customers (like me) as Netflix did last year by introducing SafetyNet checks on app installs.
A government is a body of people notably ungoverned - AC
57% say they would leave Netflix.
How many actually would cannot be determined by a bunch of muppets handing out some fuckarsed questionnaire.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Funny, thx.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
Thanks, your insight has helped to make this clear to me. Every time I've seen those ads I've been so...disturbed.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
Or the mesothelioma lawyer fishing expeditions. Maybe if the ads weren't tending toward so damn gross?
Or frightening? How about the "help I've fallen and I can't get up" people. The fairly recent one where the camera slowly pans through the house, and then you hear the calls for help fade in from the basement. It was done so well that some people wrote in to have them removed. Devastatingly effective in this case.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
...I had Fox headline news on my radio the other day and was surprised to hear one of their normal "invest all your money here" ads, except it was promoting marijuana.
If you grow it, they will come.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
Or the mesothelioma lawyer fishing expeditions. Maybe if the ads weren't tending toward so damn gross?
Or frightening? How about the "help I've fallen and I can't get up" people. The fairly recent one where the camera slowly pans through the house, and then you hear the calls for help fade in from the basement. It was done so well that some people wrote in to have them removed. Devastatingly effective in this case.
Nothing like frightening old people and their adult children. Yeah - that commercial should be removed.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.