Netflix Discontinues Cheapest No-Ads Plan in the U.S. and U.K., Focusing on Boosting Customers on Ad-Supported Tier.
Netflix has decided to discontinue its most affordable streaming plan without ads in both the U.S. and the U.K., aiming to encourage value-conscious consumers to opt for its ad-supported package.
The Basic plan, which previously allowed a single stream at $9.99/month in the U.S. and £6.99/month in the U.K., is no longer available for new or returning members in these countries. Existing Basic plan subscribers can continue using this plan until they decide to change or cancel their subscription.
This move by Netflix is part of a strategy to drive more customers towards the ad-supported Standard With Ads plan, introduced in November last year. The company has experienced considerable success, with over 5 million members signing up for its ad-supported plans as of May and 25% of new subscribers opting for this package.
A spokesperson from Netflix explains, “Our starting prices of $6.99 in the US and £4.99 in the U.K. [for Standard With Ads] are lower than the competition and provide great value to consumers given the breadth and quality of our catalog.”
After discontinuing the Basic plan in Canada the previous month, Netflix now follows suit in the U.S. and U.K., coinciding with the upcoming Q2 2023 earnings report scheduled after the market closes. Industry analysts anticipate substantial revenue growth from Netflix’s recently launched paid-sharing program, an initiative to monetize unauthorized password sharing that was widely introduced during Q2 in the U.S. and several other countries.
In the Q1 2023 earnings report, Netflix revealed that the ad-supported plan in the U.S. already generated higher overall average revenue per customer (ARPU) than the $15.49/month Standard plan. This indicates that the company earned at least $8.50/month in ad revenue per subscriber on the Standard With Ads plan.
The Standard With Ads plan offered by Netflix allows viewing on up to two devices simultaneously, similar to the no-ads Standard plan. However, this package does not include offline viewing and the option to add an extra member. Additionally, the method consists of an average of 4 minutes of unskippable ads per hour.
Netflix assures its customers that “the vast majority of TV shows and movies” are available on the ad-supported plans, though a “small number” are excluded due to licensing restrictions. Netflix’s ad-supported programs are available in the U.S., U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, and Spain.
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