Netflix is starting to rescind an olive branch that it extended to customers in the wake of a drastic change it made to its Basic, ad-free plan, the cheapest option for customers who like to stream content without ads.
In July last year, Netflix axed the option for “new or rejoining members” to sign up for its Basic plan, but allowed subscribers who were already enrolled in the plan to remain. Now, Netflix has announced that users in Canada and the U.K. will be kicked off of the plan by the second quarter of 2024, according to its fourth-quarter earnings report.
Customers in those countries will instead be forced to consider more expensive ad-free options, and one can’t help but wonder if the U.S. will be next.
“The ads plan now accounts for 40% of all Netflix sign-ups in our ads markets and we’re looking to retire our Basic plan in some of our ads countries, starting with Canada and the UK in Q2 and taking it from there,” said Netflix in its fourth-quarter earnings report.
When the streaming giant first removed the Basic ad-free plan for new and returning subscribers last year, the change first took place in Canada in June and was later rolled out in the U.S. by the following month. So Netflix’s decision to remove its cheapest ad-free plan altogether for users who chose to remain on it could soon be a change that U.S. subscribers will be forced to face in the future.
The homepage on Netflix’s website where consumers are given the option to sign-up for an account.
Netflix’s current ad-free plan options are pricier. As a result of a price hike in October last year, users who remained on the retired Basic plan saw their monthly price increase from $9.99 to $11.99, its Standard plan is rose to $15.49 and its Premium plan is now $22.99. If customers want a cheaper option, but don’t mind streaming content with a sprinkle of ads, then they can choose Netflix’s Standard with ads plan for $6.99.
Despite a recent price hike and a crackdown on password sharing, the streaming giant appears to be doing well financially while also accelerating its subscriber growth. In Netflix’s fourth-quarter earnings for 2023, which was just released on Jan. 23, the company reported a 12% increase in revenue which is a boost from the 6% that it reported during the same quarter in 2022. Netflix also gained 13.1 million subscribers since the third quarter of 2023, it now has around 260 million subscribers globally.
“Despite a lot of competition for people’s time, we continue to improve our service and drive many times more viewing than any competitor other than YouTube,” said Netflix in its fourth-quarter earnings report.