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Netflix pushes users towards ad-based (or higher cost subscriptions) plans

Netflix pushes users towards ad-based (or higher cost subscriptions) plans

Amazon to Compete with Temu and Shein

Amazon to Compete with Temu and Shein

A Netflix image
A Netflix image
A Netflix image

Highlights:

Highlights:

  • Netflix is discontinuing its Basic ad-free plan in the UK and Canada, effective July 13.

  • Subscribers must choose between ad-supported and higher-priced ad-free plans.

  • The change aligns with Netflix’s strategy to increase advertising revenue.


Netflix is making significant changes to its subscription plans by phasing out its cheapest Basic ad-free option for existing subscribers. This move affects users primarily in the UK and Canada, with on-screen notifications prompting them to switch to a different plan by July 13. After this date, the Basic ad-free option will no longer be available as reported by The Verge.

The streaming giant initially discontinued the Basic plan for new subscribers in the US and UK in July 2023, followed by a price increase for existing customers in October. The new subscription tiers for US subscribers are: Basic With Ads at $7 per month, Standard ad-free at $15.50 per month, and Premium ad-free at $23 per month. Additionally, there's an optional extra member fee of $8 per month for account sharing outside the household.

Subscription Options:

  1. Basic With Ads: $7 per month

  2. Standard (Ad-Free): $15.50 per month

  3. Premium (Ad-Free, 4K): $23 per month

  4. Optional Extra Member Fee: $8 per month for account sharing outside the household

  5. Optional Extra Member Fee: $8 per month for account sharing outside the household

Reason behind the phaseout

Netflix is pushing its ad-supported tier due to its significant cost advantage and growing popularity. The ad-supported plan, priced at $7 per month, offers better video quality and two streams, making it an attractive option for budget-conscious viewers. According to Netflix co-CEO Greg Peters, this plan offers more value compared to the outgoing  Basic ad-free plan.

Expanding content and features

Netflix is expanding its content offerings with live sports and video games. The streaming service recently inked a deal with World Wrestling Entertainment, allowing US, UK, Canada, and Latin America subscribers to watch live WWE matches starting January 2025.

Comparison with competitors

Netflix's decision to phase out its Basic ad-free plan comes amid growing competition in the streaming market. Competitors like Amazon have already made ad-supported viewing the default for Prime members boosting its advertising audience, leveraging their vast subscriber base to dominate the ad-supported streaming market. Although Netflix's 40 million ad-supported users are significant, they are still behind Amazon's integrated approach.

Netflix's phaseout of the Basic ad-free plan is a strategic move to bolster its ad-supported subscription base. By offering competitive pricing and enhanced features, Netflix aims to attract more users to its ad-supported tier. However, this shift may cause some disruption among existing subscribers.

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