Netflix may soon have to adapt its revenue strategy for a more competitive world of streaming services by adding streaming content ads. But a recently published survey, quoted by comicbook.com, shows that if Netflix is going to add ads to its online content, it could be a very costly choice for the company. Estimates make it clear that Netflix could remove a quarter of its subscribers.
The report is signed by Hub Entertainment Research, which surveyed a sample of 1765 Netflix subscribers aged 16 to 74 to see how they would react to commercial content deployment. 23% of subscribers responded that they would give up Netflix altogether if advertisements would appear – a figure equivalent to 14 million of the current 60 million subscribers.
And yet, the news for Netflix is not entirely bad, and there is a way to discourage subscribers from losing their subscriptions simply by reducing the monthly subscription. In this scenario, only 14% of subscribers would leave Netflix with advertisements, if the monthly subscription would fall by 2 $, or 12% of subscribers would leave Netflix if the monthly subscription would fall by $ 3.
Subscribers became cautious last summer when the streaming service began broadcasting trailers after episodes in the series or movies were over. This action has led to speculation that advertisements will be introduced, and yet Netflix has insisted he is not heading in this direction. In fact, the 2015 CEO, Reed Hastings, publicly discussed this issue: “The content is for us the crown jewel. We depend on subscribers’ money to give them valuable content for the audience’s joy. ”
Even so, analysts expect that Netflix will eventually introduce advertisements, especially as this move will bring Netflix billions of revenue, as Mark Kelley said: “An advertising-funded area will bring significant cash flow, reducing Netflix’s need to increase the subscription cost, especially after 2021, “he noted in an address to customers.
For now, everything is speculation and anticipation, but this grace period will not last long. This autumn, Disney will launch its own streaming service, which will become Netflix’s biggest competitor. And the acquisition of 20th Century Fox by Disney will give studios a control pack for streaming service Hulu, Netflix’s biggest competitor. This is a major blow to Netflix’s trading horizon, and it’s still to be discussed how the company will react if Disney takes away a major portion of the market share, writes comicbook.com.