Netflix raised the ceiling on how much you could spend on a monthly subscription in October. The new high? $23. Now it plans to raise the floor on how much an ad-free plan will cost you.
As The Verge reports, Netflix announced to shareholders today that it will begin phasing out its basic ad-free plan that costs $11.99 USD.
The move is a result of Netflix’s shift into ad-supported streaming after relying on subscription revenue alone for years. Netflix wants subscribers to its basic ad-free plan to instead become ad-viewing subscribers or pay more for the streaming service.
Once eliminated, Netflix will go from four to three price points:
- Ads – $6.99 / £4.99 / 5.99€
- Standard (HD) – $15.49 / £10.99 / 13.49€
- Premium (4K) – $22.99 / £17.99 / 19.99€
Prices are based on today, of course, and you should never bet against more price increases from Netflix. While Netflix plans to make the change in markets with ad-supported streaming, it sounds like US customers won’t be affected until the UK and Canada lose access starting in the second quarter of this year.
Here’s the relevant quote from the letter to shareholders:
Scaling our ads business represents an opportunity to tap into significant new revenue and profit pools over the medium to longer term. In Q4‘23, like the quarter before, our ads membership increased by nearly 70% quarter over quarter, supported by improvements in our offering (e.g., downloads) and the phasing out of our Basic plan for new and rejoining members in our ads markets.
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. On the advertiser side, we continue to improve the targeting and measurement we offer our customers.
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