How Commercials Can Become the Downfall of Netflix

How Commercials Can Become the Downfall of Netflix

How Commercials Can Become the Downfall of Netflix
How Commercials Can Become the Downfall of Netflix

Every day more and more subscription are made into Netflix. Things are looking pretty good right now since Netflix has a really strong fan base and quite a number of following. But what happens an Ad-free platform like Netflix does something irritates most of its users. Yes, we’re talking about Advertisements. A recent study just showed that Netflix could lose more than half of its subscribers if commercials are added. Let us look at how this poor decision will affect Netflix. The whole spectrum of the entertainment industry has now shifted and undergone major changes due to the emergence of Netflix. The old and young generation both nowadays prefers this streaming platform.

What is Netflix?

Netflix is an American media-streaming service that allows its users to watch a wide range of award-winning TV shows, movies, documentaries. And the users can do this on thousands of internet-connected devices. Even though Netflix offers a 30 day trial period, users need to pay an amount for their subscription to continue. Headquartered in Los Gatos, California this production company has over 154 million subscriptions total including free trials with 148 million paid subscriptions worldwide. Netflix also has offices in the Netherlands, Brazil, India, Japan, and South Korea.

The Audience Project Report

According to new research, the majority (57%) of UK customers would stop watching Netflix if commercials were introduced. And that’s not just bad news, subscriptions would also have a significant drop off of 42%. A marketing technology firm called Audience Project released the report. Here are some of the key findings. In the UK, Netflix has a streaming audience of 70% followed by BBC iPlayer (61%). Players like YouTube, ITV Player and All4 saw a decline after hosting ads. Streaming is on the rise especially amongst the young.

Why Netflix is rising?

Netflix is dominating the streaming market with no doubt. Because in the UK 70% of respondents are using Netflix to stream or download TV programmes and films. And their strategy is clearly working as the company is also the number one streaming service in other countries like US, Germany, Denmark, Sweden, and Norway. And the results of the survey is proof that Netflix should grow its investment in content rather than considering hosting advertising. The Commercial Director UK at AudienceProject, Martyn Bentley commented that their findings highlight the growing importance of targeting and relevance in advertising.
Nowadays consumers have several choices over anything and everything. We can also say the same in the case of ads, consumers can decide whether or not they see ads. Now for most people in UK TV is still the preferred streaming device.42% people still prefer TV for streaming/downloading TV programmes and films, with computers following behind at 39%, while 36% use mobile, 32% use tablet, 28% use a connected TV box and 17% a video game console. However, in Germany, Sweden and Finland’s computer has surpassed TV for streaming.

We mentioned earlier that streaming is on the rise amongst the young. It has been reported that83% of all UK respondents still watch traditional TV weekly. Now fewer people stream/download every week compared to those that watch traditional TV. Amongst younger people, most of the
15-25 year-olds (63%) stream/download as watching traditional TV (65%). Even though the television viewer rate is higher compared to other devices, double-screening is an actual thing.
But it provides engagement opportunities. In the fact that 63% of viewers use other devices while watching TV. This potential of double screening is that it provides an alternative and additional paths to engagement.

Every year more and more people are cutting the cord with their cable company. We now have a multitude of streaming services out there starting with Netflix. They now offer up a wide range of content across many genres. From full seasons of TV shows to classic movies, Netflix has more entertainment than you could ever possibly imagine. And when it comes to the pricing, once you’ve subscribed you will get access to every content. But introducing commercials means that Netflix could lose subscription and hence its popularity. This might also lead to the rise of competitors that are on a race to win the streaming crown. So it would be wiser and secure for Netflix not to bother with adding advertisements into it, rather focus on providing good quality content.

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