Netflix has bid adieu to its cheapest streaming plan without ads in the United States and the United Kingdom. The streaming giant is steering customers towards its advertising-supported package, Standard With Ads, which has been gaining popularity since its launch last November.
The ousted plan, known as Basic, used to offer a single stream for just $9.99 per month in the U.S. and £6.99 per month in the U.K. However, according to Netflix, the Basic plan is no longer available for new or returning members in both countries. Existing Basic subscribers can stick to their plan until they make changes or cancel their accounts.
Netflix’s decision to eliminate the Basic plan aims to bolster its customer base on the ad-supported Standard With Ads plan, which has already attracted over 5 million members since its debut. Notably, 25% of new subscribers have opted for the advertising-supported package, indicating its appeal among consumers.
“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,” stated a Netflix spokesperson, emphasizing the affordability and content variety offered by the ad-supported plan.
This strategic move follows the recent discontinuation of the Basic plan in Canada. As Netflix prepares to unveil its Q2 2023 earnings, analysts anticipate a significant boost from the company’s new paid-sharing program, an initiative aimed at monetizing illicit password sharing, which was widely launched during Q2 in the U.S. and several other countries.
During Q1 2023 earnings, Netflix reported that the ad-supported plan in the U.S. was already generating higher average revenue per customer (ARPU) than the $15.49 per month Standard plan. This suggests that the company is raking in at least $8.50 per month in ad revenue per subscriber on the Standard With Ads plan.
While the Standard With Ads plan offers simultaneous streaming on up to two devices like its ad-free counterpart, it does not include offline viewing or the option to add an additional member. Viewers can expect an average of four minutes of unskippable ads per hour.
Netflix assures customers that the majority of its extensive library of TV shows and movies are available on the ad-supported plans. However, a few titles may be excluded due to licensing restrictions. Currently, the ad-supported plans are accessible in the U.S., U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, and Spain.