More than one third of Brits say they would cancel an ad-funded Netflix

LoopMe’s research was published in response to news from Netflix’s chief executive Reed Hastings that the streamer would introduce ads within the next year or two. While a third said they would give up Netflix, a marginally lower 33% said they would tolerate ads for a cheaper monthly subscription.

The data also backed up Netflix’s password-sharing woes, with only 14% having a subscription to a streaming service, yet one in two confirming they use Netflix.

The research mirrored insights uncovered by Kantar in April, which revealed a whopping 1.5 million Brits cancelled an SVOD in the first half of the year and drew a link between the cost of living and subscription cancellations. LoopMe found nearly half (47%) of consumers listed affordability as the key reason for canceling a streaming service and one in 10 (9%) had already canceled a subscription in the past month. Of that 47%, the 55-64 demo were the most likely to give up a subscription for cost reasons.

The lack of good content was cited as the second reason for canceling a streamer (29%), 8% said the presence of advertising and 5.6% said irrelevant ads on a streamer would force them to leave.

Sarah Rew, senior director, global marketing at LoopMe, said: “Considering the current cost-of-living crisis, it comes as no surprise that people would find ways to save money where they can. It’s clear Netflix will have to consider its affordability moving forward, with an ad-funded model a potential way to offer content at a lower cost.”

Rew warned that an ad-funded Netflix might not be enough to retain or attract new customers. “Netflix would have to focus on delivering relevant, quality content, both in terms of programming and advertising, with a full understanding of how brand advertising could enhance its offering, rather than detract from the experience,” she said.

Rew’s insights echo the wider ad industry narrative that Netflix would have to roll out unintrusive ads to keep subscribers on board.

Earlier this week, GroupM’s global director Simon Thomas said Netflix would take a big risk introducing ads. “If it is too aggressive on it, it risks upsetting part subscribers or it will deprecate the level of quality so much that it will be a tipping point for people to move away,” sajd Thomas. “That’s a balance Reed [Hastings, Netflix chief executive] has got to make.”

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