Whelp, I guess we all knew this was coming. With no formal announcement, Netflix removed its $9.99 “Basic” subscription tier for anybody trying to sign up for a new account or resubscribe in the U.S. and UK. Now your two options are to pay $5.50 more per month for the “Standard” plan, or otherwise suffer through constant ad interruptions with what’s now been dubbed “Standard with ads.”
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All the changes are listed on the service’s help center page. The company noted that the Basic plan “is no longer available for new or rejoining members. If you are currently on the Basic plan, you can remain on this plan until you change plans or cancel your account.” Netflix pulled the same move in Canada last month, again without any official announcement. The company has been extra cagey about its latest subscription plan shakeup, which could lead to some rather nasty surprises for anybody who leaves Netflix but comes back later hoping to sign up for the $10 ad-free option.
Netflix’s move seems to be steering more people to its ad-based option in order to bump the number of ad views, which Netflix can then use to sell more advertisers on its growing ad business. Recent data suggests the share of “With Ads” subscribers has been growing since the tier first launched late last year. Then again, Netflix needs to compete with other streaming services sporting ad-tiers. According to data from analytics firm Antenna, Netflix saw the smallest growth of new ad-supported subscribers in the U.S. compared to practically every other major streaming service since the start of 2023.
Less than one in five new subscribers sign up for the ad-supported option on Netflix, according to Antenna’s data. However, Netflix CEO Greg Peters claimed at the company’s latest Upfront presentation that a quarter of all new sign-ups are going With Ads across the world.
The company under ex-co-CEO Reed Hastings once eschewed traditional cable-style advertising completely, but recently Netflix has been courting ad leaders with promises of “episodic” ad campaigns and new forms of targeted advertising. Netflix is essentially saying that after its current deal with Microsoft runs out, it wants to test technology that could cut down on the number of repetitive ads shown to viewers.
And this latest move comes just as Netflix slides towards putting an end to password sharing in the U.S. and some of its other biggest markets. Netflix continues to advertise that users can transfer profiles on an old account to a new one, and earlier this month the company announced users can now transfer profiles to existing accounts as well. Otherwise, users will be forced to spend an extra $7.99 a month to add extra users to their accounts.
Just a few days ago, Peacock became the latest streaming service to raise prices. Across the board, NBC’s own monthly streaming subscription prices increased by $1 or $2, while annual plans went up by $10 and $20 for the Premium and Premium Plus plans, respectively.
Netflix raised its own prices in January last year, which was the second price jump in just two years. For 2023, Netflix is introducing new ways to increase prices, not by directly raising costs, but by limiting options users had to watch ad-free content in their own homes or through the generosity of friends and family.
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