Netflix Customers Would Be Open to Ad-Based Model With Right Value, Says Hub

Amid speculation Netflix is considering an advertising-supported subscription plan, Hub Entertainment Research released survey results Wednesday saying many subscribers would be open to the idea but only with a “significant discount." If Netflix included ads and kept current pricing, 41 percent said they would definitely or probably keep the service vs. 23 percent who said they would definitely or probably drop their subscription. If Netflix added an ad-supported tier as an option, a $3 lower price could persuade subscribers to sign up for the ad-free alternative, Hub said, while a $1 price drop for ad-supported “wouldn’t move the needle much.” If the current ad-free plan rose by $3, 58 percent of subscribers would switch to an ad-based tier at the current fee; 20 percent would quit, it said. The success of any Netflix ad-supported plan -- whether a replacement plan or supplemental one -- depends on whether consumers feel they’re getting a sufficient price break and value, said analyst Peter Fondulas: “Any attempt by Netflix to use an ad-supported plan as a reason to hike its ad-free price again could seriously backfire.” The July online survey was conducted with 1,765 U.S. consumers ages 16-74 who watch a minimum of one hour of TV weekly. Netflix didn't comment.