In its early days as a streaming service, Netflix wasn’t just the biggest and best company on the block – it was the only one. In those heady days, Netflix was able to charge low subscription rates and still provide a catalog that included just about everything.
As we’ve seen, that’s been changing. With new competition from companies like Hulu and Amazon, Netflix has seen streaming deals get pricier and customers get antsier. For a few years now, Netflix’s catalog has been shrinking while its prices have been rising.
So where’s a streaming company to find new profits in a tight market? According to some people, the answer is for Netflix to start showing ads, like competitor Hulu does. That would give the company new revenue streams without forcing them to raise prices.
Of course, there’s a group of stakeholders that’s still left unaccounted for here: Netflix’s customers. We decided to ask them about the issue. And, in a survey of more than 1,200 people on Reddit, we got some pretty clear answers.
How Do Netflix’s Subscribers Feel About Ads?
We took it as a given that most customers would prefer Netflix to cost as little as possible, be free of ads, and have tons of content. But we know that’s impossible, and we know that Netflix’s competitive landscape is getting tougher every day. So we took Netflix’s two most obvious paths to new revenue and asked respondents to weigh them against each other.
“Would you rather pay more for Netflix,” we asked, “or see advertisements while you stream?” In a subsequent question, we drilled down further by asking the group that would pay more just how much they’d be willing to shell out.
The results were overwhelming. Of our more than 1,200 respondents, an incredible 90% said they’d prefer a price hike to ads. That must gel well with Netflix’s own internal findings, since they’ve repeatedly chosen to up their prices rather than go for ads.
But how much more leeway does Netflix have? The sweet spot appears to be $1-2, which 57% of respondents chose as their upper bound. A further 22% said they could go as high as $2-3 more, and less than a quarter were willing to go higher.
Netflix Risks an Exodus If They Sell Ads
Netflix users had a clear preference for paying $1-2 more for the service rather than watch ads. But the most extreme results came when we asked a more difficult question: would ads be enough to make you cancel Netflix entirely?
In remarkably large numbers, our respondents claimed that they would indeed cancel Netflix over ads. Nearly three quarters of respondents – 74%, to be exact – said they’d be done with Netflix if ads debuted on the service.
Our survey offered a comment section, and those that took advantage of it overwhelmingly used it to voice their disapproval for ads. A noticeable minority resorted to profanity to voice their displeasure. Clearly, ads on Netflix would upset a lot of users, and plenty of them were happy to have the chance to say just how quickly they’d ditch the streaming leader.
Whether all of these users would follow through on their threats to cancel the service if Netflix did indeed get ads is an open question, but if even a fraction of them did, the company would lose a lot of revenue in their quest to do the opposite. Netflix’s users are sending the service a pretty clear message: if the service starts selling ads, customers would consider leaving.
Or, as one respondent put it: “WTF, I would cancel immediately.”
This post was also published on Cordcutting.com.