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Netflix 'Would Lose 57 Percent of Their Subscribers If They Added Commercials' (netimperative.com)

Posted by BeauHD on from the commercial-breaks dept.

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."

9 of 287 comments (clear)

  1. They missed the interesting question by dgatwood · · Score: 5, Insightful

    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.

  2. Growing importance? by GrahamJ · · Score: 5, Insightful

    Our findings highlight the growing importance of targeting and relevance in advertising

    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.

    1. Re:Growing importance? by ceoyoyo · · Score: 5, Insightful

      Copied and pasted exactly the above quote to say just what you did.

      Advertising people are special. I've known a couple, very nice people, in terrible jobs. The stories they tell themselves to justify what they do. Most of the ones I've known have eventually gotten out. And their story changes when they do.

    2. Re:Growing importance? by mentil · · Score: 5, Interesting

      This raises the question of what's going to happen to video ads once broadcast TV goes away. If everyone's watching commercial-free services like Netflix, then where are people going to see these things? Are advertisers just going to rely on other types of ads, like on web pages? Print is dying as fast, although some audio streaming services have audio ads. Maybe it'll move to sponsorships, with the content producer talking about the product or having product placement.

      --
      Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
  3. 100% of Attention by dohzer · · Score: 5, Insightful

    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.

  4. I'd think it'd eventually be 100% by Rick+Schumann · · Score: 5, Insightful

    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.

    1. Re:I'd think it'd eventually be 100% by sysrammer · · Score: 5, Insightful

      This is how HBO/et.al. started:
      q. People said "Why would i want to PAY for a TV channel when I can watch it for free?"
      a. Well, exclusive content and no ads. ...and then there were a few ads for a few HBO shows. Ok, we can accept that...sorta like movie trailers. And then you had "This show presented by Proctor & Gambel", but that was just at the start and end, and we said..."ok, that doesn't hurt much"... ...and shortly after that, the frog was boiled.

      PS: from an old rant: "Who needs all these channels? Who the heck is going to watch a channel about the WEATHER?"

      --
      His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
  5. Re:Same with Youtube by Hadlock · · Score: 5, Interesting

    It turns off ads on youtube for roughly $10/mo USD
     
    We watch most of our evening news as clips on youtube, stuff like the late show with colbert, last week tonight, cnn, msnbc, fox news etc and specialty channels all have ads now when you watch a segment.
     
    Also useful for playlists of music, as we use our TV as a youtube jukebox when pandora isn't cutting it.

    --
    moox. for a new generation.
  6. Re: Lower tiers by Anonymous Coward · · Score: 5, Insightful

    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.