Netflix to Eliminate Cheapest Ad-Free Plan, Forcing US Customers to Go Ad-Supported or Pay More
Customers in the United Kingdom and Canada were notified that their Basic plans would expire earlier this month.
In a move over a year in the making, on Thursday, Netflix confirmed that it would be eliminating its cheapest ad-free plan for existing customers in the United States in the near future. The world’s largest streamer first eliminated its Basic plan for new customers in July 2023, but at the time, left the plan available for subscribers that had already signed up for it. Earlier this month, Netflix began eliminating the plan for existing customers in the United Kingdom and Canada and in its letter to shareholders accompanying its second quarter 2024 earnings report, the streamer said that the U.S. is next.
Key Details:
- After eliminating the Basic plan for new customers last summer, existing U.S. subscribers are set to lose access to the plan.
- Customers in the U.K. and Canada have seen their Basic plans set to expire in recent weeks.
- Netflix continues to tout its Basic with Ads plan as the best option for budget-conscious customers.
In Q2 2024, Netflix added 8.05 million customers around the world and attributed at least a portion of that to a 34% quarter-over-quarter increase in its ad-tier membership. In trumpeting the company’s Basic with Ads plan, Netflix noted the elimination of the Basic ad-free tier has helped move people to its ad-supported plan.
“[Basic with Ads’] attractiveness ($6.99 a month in the US, with two streams, high definition and downloads) — coupled with the phasing out of our Basic plan in the UK and Canada, which we will now start in the US and France — has increased our ads member base by 34% sequentially in Q2,” Netflix said in its shareholder letter.
The streaming service has not confirmed how long it will take for U.S. subscribers to be impacted, but in the U.K. and Canada, customers on the Basic plan were notified that they would need to either select a new subscription plan by a given date, or they would lose access to their Netflix plans.
Image by Reddit user r/mildlyinfuriating.
Given Netflix’s reference to this eventuality in its shareholder letter, it is likely that subscribers impacted will begin hearing from the streamer in the next few weeks. From that point, they will need to either sign up for the Basic with Ads plan for $6.99 per month or one of the more expensive plans or be prepared to lose access to Netflix’s expansive library. The remaining ad-free Netflix options are the Standard plan, which runs $15.49 per month, and the Premium tier, which costs $22.99 monthly.
Netflix would prefer that new customers, as well as those moving from the Basic plan, end up on its lower-cost Basic with Ads plan. That is because even though the monthly subscription fees are smaller on that plan, it also has the added benefit of bringing in advertising revenue as well. This means that Netflix is able to monetize each subscription on multiple fronts.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.