After Netflix cracked down on password sharing, the company removed its ad-free basic plan for Canada last month. It appears that the change in plan options has caught on in the US and the UK as the streaming service removed the basic ad-free plan as well.
Netflix Removes the Basic Ad-Free Plan
For subscribers who want the cheapest plan on Netflix without having to deal with ads, they opt for the Basic plan which costs $9.99 a month in the US and £6.99 in the UK. However, new subscribers will no longer have that choice.
Netflix has removed the option between its Standard Ad-Tier plan which costs $6.99 and the Standard tier at $15.49. Luckily for those who subscribed to the plan before the option was phased out, they will remain unaffected as long as they don't shift tiers post-change.
The streaming service stated that they have lowered its prices in less penetrated markets in Q1, followed by taking down its Basic Ad-Free plan in Canada for new and rejoining members for Q2, with the US and the UK soon after.
The company added that the entry prices in the mentioned countries "provide great value to consumers given the breadth and quality" of their catalog. For new members, they will have no choice but to endure ads for $6.99 or watch ad-free for $15.49.
Netflix Co-CEO Greg Peters mentioned in an earnings call that the company aims to optimize the service's plan structure, as mentioned in The Verge, and that they want to give customers access across a wide range of prices.
Peters also said that the company believes the entry prices that Netflix has "represent an amazing entertainment value and are attracting a healthy share of signups." There were already signs before they took the option down as the company required the "see plans" button for the Basic Ad-Free plan.
Things Are Looking Up for Netflix
When the company announced that it will no longer allow password sharing outside of primary households, it was met with both panic and backlash since a lot of people will be forced to log out of their accounts. It was expected that the streaming service would lose members for it.
However, the plan worked as Netflix saw a massive increase in signups. Initially, Netflix allowed password sharing since it helped the streaming service grow. However, after losing many of its subscribers in 2022, it shifted to a different strategy.
After the crackdown, the company saw a 100% spike in new signups from the previous 2-month average, meaning that its tactics were working. People would rather pay for their own accounts instead of the additional $7.99 monthly fee for additional users.
According to CNN, Netflix saw an increase of 1.75 million global streaming subscribers in its first quarter. Compared to last year's statistics, it was a 5% increase. We are still yet to see how removing the Basic Ad-Free plan would affect its subscriber numbers.
