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Netflix To Get Rid of Cheapest Ad-Free Plan
January 25, 2024
Netflix has announced that it will soon be eliminating its cheapest ad-free plan across the globe, reports TechRadar.
In the leading streaming service’s earnings report for Q4 2023, which was released on Tuesday, Netflix declared its plans to “retire” its basic tier from Q2 2024 and beyond. Users in the U.S. have not been able to sign up for the Basic plan since July 2023, but the platform has now decided to actually remove the option altogether for other countries across the globe. The first to be impacted will be Canada and U.K.-based consumers.
A clear date is yet to be confirmed for the other countries, and there is no news yet about which countries will be affected after.
According to TechRadar, there is only one reason Netflix is discontinuing one of its most affordable ad-free plans: ads. Netflix launched its ad-supported plan in November 2022, which analysts thought wouldn’t gain traction, assuming people would show resistance to signing up for a plan that forced them to sit and watch four-minute ad breaks for every hour of content they watch.
However, Netflix’s ads plan has done well from a business perspective, with 15 million people subscribing in the first year of its launch. At the beginning of this year, it revealed that the figure has spiked by 8 million since November 2023, adding up to a total of 23 million people, or around 10% of all Netflix users. Overall, the platform’s fanbase is currently at 260 million, with 40% of its new users signing up for the ads-based plan.
Since its ads tier is so popular, Netflix’s decision to introduce such a plan has done well for them. Its revenue streams have been doing very well, its profit margins shot up, and its executive team has a lot to celebrate in turn.
With its ads plan bringing in significant revenue, it’s not surprising that Netflix plans to drop its cheapest ad-free tier and make Netflix With Ads the default subscription option for those on the hunt for a cheaper deal.
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