Streaming giant Netflix has removed its $9.99 ad-free “Basic” plan in the United States and the United Kingdom, following a similar move in Canada.
The elimination of this tier pushes new subscribers towards more lucrative subscription options. On Netflix’s sign-up page, only three options are now available for new users: the $6.99 “Standard with Ads” tier, the $15.49 “Standard” plan, and the $19.99 “Premium” plan.
According to an FAQ on Netflix’s sign-up page, the Basic plan is no longer accessible to new or returning members. However, current Basic plan subscribers can remain on their existing plan until they decide to switch or cancel their account. Netflix executives have previously mentioned that the ad-supported tier generates higher revenue per subscriber than the standard tier, while remaining neutral about users’ choice of subscription tier.
This decision to remove the Basic plan in the U.S. follows the same action taken in Canada last month. Netflix introduced its advertising tier, initially named “Basic with Ads,” late last year, which has now attracted “nearly 5 million” monthly active users, according to the company’s upfront advertising presentation in May. Although active users do not equate to subscribers, it signifies a step towards that direction.
Netflix emphasized that engagement on its ad-supported plan is comparable to its ad-free plans, indicating that increased user activity translates to higher advertising revenue. The company is set to release its earnings report after the market closes today.
A Netflix spokesperson declined to comment on the removal of the Basic plan. As the streaming landscape continues to evolve, it remains to be seen how this change will impact Netflix’s subscriber base and revenue in the long run.
