Netflix risks losing subscribers if it starts running ads

Sian Bradley's picture
Netflix may start running ads

Netflix has an important decision to make - continue to miss out on ad revenue or risk losing customers.

Over half of its customers (57%) have warned they will cancel their subscription if Netflix starts running ads.

This is according to data collected by the Audience Project, an audience measurement tool and targeted campaign agency. The study surveyed 16,000 respondents across UK, US, Nordic and German audiences.

Netflix could lower their prices to compensate for the addition of ads, but it may not save many customers; as 42% of respondents would still cancel.

What do these findings mean?  

Commercial director Martyn Bentley said that Audience Project's 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,” he continued. “It suggests that greater inroads need to be made with Connected TV as a means to help tailor advertising at a granular level.”

Regardless of whether Netflix introduce ads or not, they have still been experiencing a healthy increase in customers lately. Figures from 2018 showed that the number of 15-34-year-olds watching Netflix grew from 39% in 2017 to 54% last year.

In total, 70% of UK respondents said they use Netflix. Interestingly, more Brits still watch traditional TV, with 83% of all UK respondents saying they tune in on a weekly basis.