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Netflix could lose subscribers if it starts running ads

It recently tested video adverts between episodes to promote its original content

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MUMBAI: Netflix users enjoy watching ad-free seamless content. The subscription-based video on demand service recently confirmed that it tested the idea of inserting promos for its shows and movies between episodes of existing programmes. A recent study found that if Netflix content includes ad, it could cost it the overall number of subscribers.

Hub Entertainment Research in its recent study The Future of Monetization examined consumer reaction to several alternatives of Netflix pay model. It surveyed 1,612 TV consumers from ages 16 to 74 who watch at least an hour of TV per week and have broadband at home.

If Netflix increases its subscription by $5, 23 per cent of the respondents said they may cancel the subscription. If it’s being raised to $10 more per month, 28 per cent would consider cancelling it. If the platform were to raise its monthly fee by $2, only 8 per cent said they would cancel.

More importantly, almost one-fourth of the respondents said they would drop the streaming service if it began running ads during Netflix content. Its ad-free consistency is one of the topmost features which attract subscribers.

“I think there are ways that they could arrange it so they retain as many customers as possible, but I think if they add ads at all, even at price reduction, there will be some people who leave,” Hub principal Jon Giegengack said.

Principal at Hub and co-author of the study Peter Fondulas said Netflix’s low price, no ads, vast amount of programming and original shows help it to stand out in the crowded US market.

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