If Netflix ever decides to start running ads on their service, it likely wouldn't turn out to be a great business decision. The world's largest streaming service is sitting pretty at just shy of 140 million subscribers worldwide, which absolutely blows away even the closest competition in the marketplace. They're an attractive service and a monthly expense that many people just pay for without hardly a thought these days. But people have limits, and, according to a recent study, for many, throwing commercials into the mix would test those limits.
There is no indication currently that Netflix is considering streaming ads during or before/after any of their programming right now. However, another study from 2017 revealed they were possibly losing $2 billion or more annually by not running ads. That is, assuming their subscribers were willing to stick around. And that's the point with this most recent study, which was conducted in the U.K. Its findings revealed that this would be a very poor business strategy.
"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%, according to new research."
Granted, this study was conducted in the U.K. and it doesn't necessarily mean that they would lose that many subscribers worldwide. And this is also just a survey. When presented with the actual choice to lose out on everything Netflix has to offer, these same people surveyed may find the decision a bit more difficult. That said, the evidence before us suggests this would be a wildly unpopular idea. Especially considering that 42 percent of people would still leave even if Netflix dropped the price in order to help make the commercials more palatable.
For many, the appeal of Netflix is that it revolutionized the way we watch TV. No ads. No interruptions. At worst, they just check in on us every handful of episodes to ask politely if we're still binging old episodes of The Office. People have gotten used to this and it would be tough for them to go back to seeing ads. Especially for younger viewers, who probably hardly have any concept that commercials used to just be the accepted price for watching something on TV.
Last year, Netflix began testing a feature where they would show ads for another one of their titles between episodes while the user was watching content. Even this angered people a great deal. It seems as though subscribers are much more comfortable with the recent price hike that the company implemented than they would be with commercials of any kind. While advertisers would surely chomp at the bit to have their latest ad run during Stranger Things season 3, or ahead of Martin Scorsese's The Irishman later this year, and while Netflix would surely love the revenue, it would be bad for business. This information comes to us from Net Imperitive.