"Even at a Monthly Fee of 5,500 Won, Reluctant..." Dissatisfaction with Both Netflix Price and Ads

Consumer Insight: 13% of Survey Respondents Have No Intention to Switch Plans
Subscribers Dislike Ads That Interrupt Video Flow... Netflix Explores Sports Live Streaming and More

[Image source=Yonhap News]

[Asia Economy Culture Young Intern Reporter] One week after Netflix introduced its 'ad-supported plan,' a survey found that only about one in ten consumers expressed willingness to switch from their existing subscription plans.

The ad-supported plan, launched in nine countries including South Korea, costs 5,500 KRW per month (based on the Korean market), which is 4,000 KRW cheaper than the Basic plan priced at 9,500 KRW. However, viewers must watch approximately 4 to 5 minutes of ads per hour of content.

According to a recent survey by Consumer Insight, a consumer research specialist firm, which polled 1,473 consumers about their perceptions of the ad-supported plan, only 13% responded that they would either newly subscribe to the ad-supported plan or switch from their current plan. The survey included both Netflix subscribers and non-subscribers.

Fifty-one percent of respondents said they had no intention of switching, while the remaining 35% were undecided. Among subscribers, only 15% expressed willingness to switch, whereas 12% of non-subscribers indicated an intention to subscribe.

Both subscribers and non-subscribers cited "disliking watching ads itself" as the primary reason for not choosing the ad-supported plan. Other reasons included ▲the ad viewing time being too long (14%) ▲lower video quality (12%) ▲only one simultaneous stream allowed (11%) ▲and the price not being sufficiently cheap (8%).

Among non-subscribers, "the price not being sufficiently cheap" ranked first at 21%, followed by ▲ad viewing time being too long (13%) ▲lower video quality (9%) ▲and only one simultaneous stream allowed (5%).

Both subscribers and non-subscribers ranked "disliking watching ads itself" as the number one reason for not wanting to use Netflix's 'ad-supported plan.' Photo by Consumer Insight

Consumers considered the appropriate subscription fee for the ad-supported plan to be an average of 4,200 KRW, with an acceptable ad duration of 2 minutes. Regarding price, 57% were willing to accept up to 5,000 KRW, but acceptance sharply declined beyond that. At 5,500 KRW or more, only 28% of respondents were willing to accept the fee.

Moreover, resistance to ad duration was greater than to price. Respondents showed 80% acceptance for ad durations of "less than 1 to 2 minutes," but this dropped to 51% for the "2-minute range." This is about half the current 4 to 5 minutes of ads per content segment.

Consumer Insight analyzed that consumers have a strong aversion to ads that interrupt the flow of video viewing itself and are also sensitive to ad duration and price as secondary factors. The firm explained, "While the difference between the actual price and the majority of consumers' acceptance threshold is not large, suggesting potential for consensus, the perception gap regarding ad duration is significant, making it much harder to reach an agreement."

Netflix is actively seeking investments in live sports broadcasts to attract new subscribers. The Wall Street Journal (WSJ) reported on the 8th (local time) that Netflix bid for the broadcasting rights to the men's professional tennis (ATP) tour in European countries such as the UK and France but later withdrew. It also added that Netflix discussed bids for other sports, including women's professional tennis (WTA) and cycling race broadcasting rights in the UK.

Online video services (OTT) are already fiercely competing in the sports sector. Amazon Prime Video broadcasts "Thursday Night Football," while Apple's Apple TV+ and Comcast's Peacock secured broadcasting rights for last season's Major League Baseball (MLB) games. Earlier this year, Netflix participated in bidding for the live streaming rights of Formula One (F1), which has become a popular sport in the US, but lost to Walt Disney's ESPN.

This content was produced with the assistance of AI translation services.