Netflix could lose almost a quarter of its subscribers if it started running ads, study shows

Netflix could face a substantial hit to its subscriber numbers if it brings advertising to its streaming service, a new report finds.

Twenty-three percent of respondents to a recent Hub Entertainment Research survey said they would definitely or probably drop their Netflix subscription if it began running ads at its current price point or a dollar cheaper, according to Streaming Media. That percentage would represent a loss of nearly 14 million subscribers from Netflix’s 60 million paid subscribers in the U.S.

Respondents were more forgiving of the ads if Netflix dropped prices. Only 14% of respondents said they would definitely or probably drop their subscription if it were $2 cheaper than they currently pay. That number fell to 12% at a $3 discount.

The study’s findings were based on a survey of 1,765 U.S. TV consumers between ages 16 and 74 who watch at least one hour of television a week and have broadband in the home.

The Hub study comes as advertising insiders speculate Netflix will make advertising a core part of its business someday. At a panel during IAB’s Digital Content NewFronts in April, Joshua Lowcock of media agency UM said he “can’t imagine a world where Netflix will be ad-free forever.”

Netflix does not run ads, but sometimes products appear within popular shows. The business relationship for those placements is complicated: The company recently told CNBC that it rarely accepts paid placement, but some brands pay a third-party to help facilitate product placements, often at the request of show creators.