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Jan. 25, 2024
Netflix Signals End for No-Ads Basic Plan
The streaming service plans to discontinue the Basic plan in selected countries, starting with Canada and the U.K. in Q2. By: Wee Yan Ling
Netflix’s
financial report for Q4 of 2023 has unveiled a major shift in its subscription
offerings, as the company prepares to remove its most economical plan which
comes without advertisements. The report underscored the success of the
ad-supported plan as it accounted for 40%of new Netflix sign-ups in markets
where it has been introduced. The subscribers opting for the ad-supported tier
had boosted the growth of Netflix by 70% quarter-over-quarter. This in turn
resulted in the total monthly active unique users on advertising tiers to
surpass 23 million.
In
order to propel the popularity of its ad-supported plan, Netflix has announced
the retirement of the Basic plan in specific countries, starting with Canada
and the U.K. in the second quarter of the year. Netflix co-CEO Greg Peters has
underscored that the advertising business is still in its infancy and it would
take years before it becomes a substantial revenue contributor.
This
decision follows Netflix's earlier move to stop offering the Basic plan to new
subscribers in the key markets which encompasses Canada, U.S. and the U.K. The
Basic plan had a price hike last fall as it stands at $11.99 per month in the
U.S.
Netflix’s
ad-supported tier is gaining traction as it is made available in countries such
as the U.S., U.K., Australia, Canada, and more. The Netflix Basic with Ads tier
is priced at $6.99 per month and is a much more affordable option as it costs
less than half the cost of the Standard price which stands at $15.49 per
month.
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