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One of the many benefits to watching TV shows and movies via a broadcast service such as Netflix is the lack of ads. Many subscribers have openly admitted to preferring Netflix to Hulu because Netflix does not include ads with their service.
As Inquisitr reported a few weeks ago, Netflix is currently entertaining the idea of including advertisements with their content. The streaming giant, however, has tried to soften the news of its subscribers by saying that the ads are actually "recommendations" based on what the subscriber is currently watching.
Not surprisingly, CNBCNetflix subscribers did not respond very well to the idea of adding advertising to the streaming giant's service.
Netflix adds 500 to 1,000 contents to its library each year. As the broadcast giant continues to move toward original content as network deals end, Netflix is expected to spend $ 8 billion this year. Given the expense of the streaming giant, it makes sense that they want to try to find a way to reduce costs.
Advertisements and advertisements – or recommendations that the broadcast giant makes reference to – provide Netflix with a whole new source of revenue to exploit. With this new opportunity, Netflix would be able to charge fees to businesses to run ads and ads on their streaming service.
Netflix, however, must weigh the pros and cons and decide if the money from the ads is worth the money they will lose subscribers who choose to remove the service because they do not like the commercials.
Netflix Billion Content License Budget https://t.co/Y3aEB5TS07
– TheRealDonSwaGG (@bestnewartist) September 16, 2018
While this may seem like an idiotic reason to remove the service and some may assume that the number of subscribers who cancel their services can not be compared to the number of people with a Netflix subscription, CNBC reports that may not be the case.
According to a recent study, the addition of advertisements and lower prices are not enough to entice a large portion of Netflix subscribers to stay. In fact, most subscribers insist that they would prefer to pay higher prices than to be bombarded with commercials.
I am sorry. But can anyone explain why Netflix has just played a commercial role?
– Jordyn Galvan (@jordyn_galvan) September 12, 2018
The study revealed that 23% of subscribers would probably give up their service if the broadcast giant were advertising. The study also found that 41% of subscribers would "probably or probably subscribe".
These numbers leave just over half of Netflix subscribers trapped in "maybe". These subscribers will probably test the content with advertisements and pass judgment afterwards.
While Netflix rejects commercials, Hulu offers a tighter embrace – Variety https://t.co/xa5N9RsMyn
– Julie Pedley (@pedleyjulie) September 15, 2018
If Netflix decides to go ahead with ads, it could backfire because a huge loss of subscribers and a drop in subscription prices will not pay the extra money expected by the streaming giant. If the company insists on going ahead with the ads, it may have to pull out a page from Hulu's game book and offer the opportunity to pay higher membership fees to remove the ads.
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