Netflix Kills Off Cheapest No-Ads Plan in U.S., U.K. as It Looks to Boost Customers on Ad-Supported Tier
Netflix is no longer offering its cheapest streaming plan without ads in the U.S. and the U.K., with the company aiming to push value-conscious consumers to sign up for its advertising-supported package.
The Basic plan, which provided a single stream for $9.99/month in the U.S. and £6.99/month in the U.K., is no longer available “for new or rejoining members” in the respective countries. According to Netflix, existing Basic members can “remain on this plan until you change plans or cancel your account.”
The elimination of Netflix’s Basic plan is designed to boost customers on the ad-supported Standard With Ads, which the company first launched last November. In May, Netflix said it had signed up more than 5 million members for its ad-supported plans, with 25% of new subs taking the package.
“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,” a Netflix spokesperson tells Variety.
The company dropped the Basic plan in Canada last month. The move to end the Basic plan in the U.S. and U.K. comes as Netflix is set to report Q2 2023 earnings Wednesday after the market closes. Analysts expect Netflix to report a sizable lift from its new paid-sharing program, the company’s attempt to monetize illicit password sharing that launched widely during Q2 in the U.S. and several other countries.
In reporting Q1 2023 earnings, Netflix said that in the U.S., the ad-supported plan already was producing higher overall average revenue per customer (aka ARPU) than the $15.49/month Standard plan. That implies the company was generating at least $8.50/month in ad revenue per subscriber on the Standard With Ads plan.
Netflix’s Standard With Ads provides viewing on up to two devices simultaneously (as with the no-ads Standard plan) but does not provide offline viewing or the option to add an extra member. The plan serves an average of 4 minutes of unskippable ads per hour.
The company says “the vast majority of TV shows and movies” are available on ad-supported plans, but that “a small number are not due to licensing restrictions.” Netflix’s ad-supported plans currently are available in the U.S., U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico and Spain.
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