Netflix has recently confirmed that it will no longer offer the ad-free Basic plan for $12 per month. This plan was the cheapest way for users to watch Netflix without commercials, but Netflix stopped offering it to new subscribers in January. In June, subscribers in the UK and Canada were removed from the plan and switched to a cheaper subscription plan with ads automatically.
In a letter to shareholders, Netflix announced that the ad-free Basic plan will be phased out in the US and France, making the cheapest commercial-free plan $15.49 per month in the US. This Standard plan allows for up to two devices, downloads, and 1080p resolution. Netflix believes that eliminating the Basic plan will attract more subscribers who are willing to watch commercials, which generates more revenue for the company on average.
The streaming company highlighted its ad tier, which now accounts for over 45 percent of new sign-ups in areas where it is available. Netflix plans to focus more on ads as part of its strategy, aiming to achieve critical ad subscriber scale for advertisers by 2025 and increase ad membership in 2026 and beyond.
This decision comes at a time when streaming subscription costs are increasing, with Netflix raising prices in October. The company hinted at the possibility of more price hikes in the future to reflect platform improvements. Despite this, Netflix has stated that it is not interested in streaming-only bundles that combine its service with other streaming platforms like Disney+ or HBO Max.
For subscribers looking to save money on their Netflix subscription, the options are limited to watching with commercials or bundling with other services like Comcast or Verizon Wireless. Netflix does not offer direct bundles with rival streamers, as it considers itself a go-to destination that limits the benefits of such partnerships.
In Q2 of 2024, Netflix added 8 million subscribers, bringing its total count to 278 million, making it the largest video streaming service. Amazon Prime Video follows closely behind with over 200 million users. As streaming options continue to evolve and prices rise, finding a reasonable way to access desired content online is becoming increasingly challenging for consumers.
