New Data Suggest People Aren’t Fond of Netflix With Ads

According to research firm Antenna statistics, just nine percent of new Netflix members in the US selected the ad-supported streaming option last month. During its inaugural month in 2021, 15% of new subscribers allegedly chose the ad-supported membership option offered by rival service HBO Max. On November 3rd, Netflix unveiled their “Basic with Ads” package for $6.99 per month, far less than the $9.99 to $19.99 monthly cost of a commercial-free membership.

Digiday claimed that Netflix had reimbursed sponsors for revenue after falling short of viewing pledges by as much as 20%, so the numbers don’t come as a huge surprise. However, the new information proves that Netflix’s move from a subscription-only to a mixed funding mechanism is off to a sluggish start.

Netflix With Ads

A Netflix representative told The Wall Street Journal, “We’re happy with the debut and interaction of our ad-supported service, as well as the enthusiasm of marketers to collaborate with Netflix.” Netflix questioned the veracity of the numbers provided by Antenna, which are derived from third-party customer data.

Been Working Towards This For Months

Netflix has described the introduction of its ad-supported tier as a process that would unfold gradually over time. President of international advertising Jeremi Gorman recently spoke with Digiday, saying that Netflix’s latest offering “isn’t emblematic of our long-term objectives” and that the company has been working on a commercial debut for six months.

“I think the biggest obstacles will actually be a temptation to rush into that perfect experience without laying that foundation first. I think it’s really important that we remain committed to getting things right, like measurement, delivery, all of those basics.”

Netflix With Ads

Insights from the remainder of the market indicate that a subscription plus advertising strategy is feasible. According to Antenna, in the United States, 76% of Peacock customers, 57% of Hulu customers, and 44% of viewers for both Paramount Plus as well as Discovery Plus belong to their ad-supported tiers. Netflix, meanwhile, is an entrenched name that has spent the last ten years as a subscription-only video service and is just now having to bolt on advertisement retrospectively.

It is Netflix’s intention to begin a worldwide crackdown on password sharing early in the new year by demanding a premium for access to the service from locations other than the primary residence. This may encourage current users to switch to ad-supported streaming at a reduced rate.