Survey: 72% of Current Netflix Subscribers Not Interested in Ad-Supported Tier
The world’s largest streaming service is banking on a major pivot to help solidify its faltering business. However, a recent survey by Whip Media suggests that nearly three-quarters of current subscribers do not plan to switch to an ad-supported tier when Netflix makes the lower-priced option available later this year. While this data does not comment on potential new subscribers attracted to a lower-cost option, it does denote how current customers feel about ads on the premium platform.
The streaming service originally announced plans to introduce an ad-supported video-on-demand (AVOD) subscription option following its first-quarter earnings report that saw the service loss total subscribers for the first time in a decade. The current plan is for the discounted tier to become available by the end of 2022.
The monthly fee for the ad-supported option would be less than Netflix’s current options — ranging from $9.99 to $19.99 — which theoretically should bring in customers currently hesitant to pay those monthly prices. While new subscribers may be willing to sacrifice ad-free programming to save a few bucks, existing customers appear to be far less likely to make the switch.
The survey of over 2,460 TV Time users from the U.S. finds that 72% of current Netflix customers are either “unlikely” or “very unlikely” to make the switch. Conversely, only 14% of current customers find the cheaper AVOD option appealing.
The move to an AVOD subscription model is far from revolutionary as HBO Max has seen a lot of success with its own AVOD service, making up 30% of its customer base after only one year. Disney+ is also developing an ad-supported tier, a move that is poised to make the company over $1.8 billion in advertising revenue by 2025, with Netflix standing to make similar gains as well.
The AVOD space is clearly booming as cash-strapped cord-cutters are looking for more cost-effective ways to enjoy their favorite content. Netflix has made a name for itself as the legacy streaming service, and current subscribers seem hesitant to lose the ad-free viewing that they’ve come to appreciate from the service.
Even so, as more consumers turn to AVOD as the preferred option, Netflix shouldn’t have to worry about current customers’ lack of enthusiasm when faced with scores of potential customers looking for a great deal. The beauty of the dual-tier approach is that streamers are able to offer customers options that meet their financial and entertainment needs. If a user is more concerned with an uninterrupted viewing experience, Netflix’s traditional premium tier makes sense. However, if they are a bit more cost-conscious the ad-supported option allows them to stream the content that they are looking for at a lower price point; a win-win for all involved.
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.
Netflix offers four plans — on 2 device in HD with their “Standard with Ads” ($6.99) plan, on 1 device in SD with their “Basic” ($9.99) plan, on 2 devices in HD with their “Standard” ($15.49) plan, and 4 devices in up to 4K on their “Premium” ($19.99) plan.
Netflix spends more money on content than any other streaming service meaning that you get more value for the monthly fee.