Netflix is making changes to its subscription plans, impacting users who are currently on the $12 ad-free plan. According to a report from The Verge, subscribers in the UK and Canada have been notified that July 13 is the last day for the current plan before being switched to either a more expensive ad-free plan or a cheaper ad-supported tier.
Last year, Netflix removed the Basic tier for new and returning customers. In January, the company announced the phase-out of the Basic tier would begin this year, starting with UK and Canada. It is not clear when U.S. subscribers will start receiving similar notifications as Netflix has not responded to requests for comments.
The ad tier, introduced in November 2022, has been beneficial for Netflix. The company faced financial challenges in late 2022 due to increased content spending and a decrease in new subscriptions towards the end of the pandemic. The ad tier, with over 40 million subscribers as of May, generates around $70.44 in annual ad revenue per subscriber. Additionally, it helped Netflix’s profits when the company implemented measures to prevent password sharing.
Once the Basic tier is phased out, users will have three subscription options: Standard with ads for $6.99 per month, Standard without ads for $15.49 per month, and Premium, which offers no ads and more supported devices for streaming at $22.99 per month.
These changes reflect Netflix’s efforts to adapt to the evolving streaming landscape and maintain its position as a leading provider of online entertainment. Subscribers will need to consider their viewing preferences and budget when deciding on the most suitable plan for their needs. It remains to be seen how these alterations will impact Netflix’s subscriber base and revenue in the coming months.
