Netflix To Remove Most Affordable Ad-Free Plan- Here’s Why

NEWS
By
23 July 2024
Cheaper Ad-Based Plan or Pricier Ad-Free Experience?
Netflix To Remove Most Affordable Ad-Free Plan- Here's Why
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Netflix subscribers enjoying one of the platform’s most affordable plans will soon need to make a crucial decision: switch to a cheaper ad-supported plan or opt for a significantly more expensive ad-free option.

In a recent investor call, Netflix announced it will phase out its Basic tier in both the U.S. and France. The Basic plan, which was previously the most budget-friendly option available for under $10 before a price increase last fall, allowed subscribers to access Netflix’s complete library without advertisements on a single screen.

This move isn’t entirely unexpected. Last summer, Netflix stopped offering the Basic plan to new subscribers. The company has already phased out this tier in Canada and the U.K., with the U.S. and France following suit.

A Netflix spokesperson confirmed to Nexstar that affected users are being notified and given a billing cycle (30 days) to transition to a different plan. However, it remains unclear if these subscribers will be automatically shifted to another plan if they do not choose one themselves.

For those looking to save, Netflix offers a “Standard with ads” plan at $6.99 per month. This plan allows users to watch “all but a few movies and TV shows,” stream on two supported devices simultaneously, and download content on two devices.

Greg Peters, Netflix’s co-CEO, president, and director, stated that the ad-supported plan “represents a tremendous entertainment value.”

Subscribers can also opt for the “Standard” plan at $15.49 per month, $3.50 more than the Basic tier. This plan includes the same features as the “Standard with ads” plan, but without advertisements. Additionally, it allows for an extra member to be added, a feature introduced to curb password sharing.

Since integrating ads and curbing password sharing, Netflix has gained nearly 55 million more paying customers and experienced a revenue surge. Between April and June, Netflix added 8 million subscribers, a 37% increase compared to the same period last year, marking the sixth consecutive quarter of subscriber growth.

Netflix’s profit for the latest quarter rose 44% from the previous year, reaching $2.15 billion, or $4.88 per share, surpassing analysts’ estimates from FactSet Research. Revenue also climbed 17% to $9.56 billion, exceeding analysts’ projections.

However, Netflix’s management predicts a slower revenue growth rate of 14% for the July-September period compared to the same time last year, falling short of the 18% growth analysts had anticipated.

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