February 23, 2024

Netflix Basic No-Ad Subscription Plan Canceled in Two Countries

Netflix continuing to evolve its business plan and model. The streamer is pushing value-conscious customers to support the streaming service’s new ad-based platform.

Over the past year, Netflix has shifted its efforts to transform the business side of the platform by changing how users access their accounts and content. Last year, the company launched its ad-supported “Standard with Ads” subscription, which resulted in about 25% of new subscribers taking up the package, which equates to about five million users. Similarly, Netflix has established a paid sharing program in the United States and other countries to monetize the sharing of passwords among people who do not live in the same household.

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Now, as Netflix’s paid sharing program is predicted to top the streaming giant’s Q2 earnings, Netflix is ​​looking to boost its revenue by ending its cheapest ad-free streaming plans in the US and UK, Diversity reports. The Basic Plan, which allowed one stream for $9.99/month in the US and £6.99/month in the UK without ads, is no longer available to new or returning users. However, current members can stay on this subscription until they change their plans or cancel their accounts.

This new update is the latest push by Netflix to entice users to opt for their Standard With Ads plan, which has starting prices of $6.99/month in the US and £4.99/month in the UK. This option is “lower than the competition and provides[s] a great value for consumers because of the breadth and quality of our catalog,” a Netflix spokesperson told Variety. The Standard With Ads plan allows for an average of about four minutes of non-skippable advertising time per hour on up to two devices at the same time. However, it does not provide offline streaming or the option to add an additional screen to the account.

According to Netflix, the company’s new business model is a success. During the Q1 earnings report, Netflix announced that the ad-supported plan was already producing higher revenue than the previous Standard plan. With the ad-supported subscription, Netflix is ​​generating at least $8.50/month in revenue per user on the Standard With Ad plan alone.

While existing users will still be able to stay on the Basic Plan, with no ads, the company confirms that “the vast majority of TV shows and movies” are available on ad-supported plans, with a small number restricted due to Netflix licensing issues. NetflixAdvertising-supported plans are becoming more popular internationally, already in the United States, United Kingdom, Italy, Japan, Mexico, and many others.

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Source: Diversity

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