Cost of living prompts consumer rethink of ad-funded streaming services

While more than a quarter of surveyed UK consumers state that they will cancel a Netflix subscription if it became ad-funded, this has dipped from 36% saying they will drop an ad-funded Netflix sub six months ago.

Consumers are becoming more accepting of ad-supported streaming services as inflation continues its climb and the cost of living rises become more severe.

A survey of more than 3,000 UK adults from mobile ad platform LoopMe, found that, as Netflix unveiled its £4.99 ad-supported tier due for release next month, 45% cited affordability as a core reason for cancelling a subscription service.

The findings revealed that 27% of respondents said they wouldn’t keep a Netflix subscription if it became ad-funded. But this was a drop on the 36% that asserted they would pull out of an ad-funded Netflix subscription in a similar LoopMe survey conducted six months before.

Content is king

LoopMe concluded the survey was an indication that consumers were coming around to the idea of ad-funded streaming services. Coupled with lack of interesting content cited as a reason for cancelling (34% of respondents), it suggests that consumers are demanding more quality for their money, including content that’s relevant to them.

A main reason for keeping an ad-funded subs model in the UK was a cheaper price, said 37% of those surveyed.

Sarah Rew, Senior Director, Global Marketing at LoopMe, said: “As the economic crisis continues, it makes sense that consumers are looking for cheaper services,”

“While the introduction of ads may have been seen as a risk for Netflix at first, it seems that consumers are warming to the prospect of a more affordable service. As every penny counts, audiences are becoming more selective about the content they consume, opting for high-quality, interesting shows to maximise their investment in their streaming services.

“It will be interesting to see how Netflix’s ad-supported model is received by consumers and whether it will boost their engagement.”


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