Netflix has made the decision to discontinue its cheapest streaming plan without ads in the U.S. and the U.K., redirecting value-conscious consumers towards its advertising-supported package. The Basic plan, which previously offered a single stream for $9.99/month in the U.S. and £6.99/month in the U.K., is no longer available for new or rejoining members in these countries. Existing Basic plan members, however, are allowed to continue on this plan until they choose to switch or cancel their account.
The elimination of Netflix's Basic plan is part of the company's strategy to encourage customers to opt for the ad-supported Standard With Ads plan, which was introduced in November last year. Netflix has experienced success with its ad-supported plans, signing up over 5 million members for this package, with 25% of new subscribers choosing it.
A Netflix spokesperson highlights that the starting prices for the Standard With Ads plan, $6.99 in the U.S. and £4.99 in the U.K., are competitively lower and offer great value, considering the extensive and high-quality content available in their catalog.
Netflix previously discontinued the Basic plan in Canada, and the recent decision to end it in the U.S. and the U.K. coincides with the company's upcoming Q2 2023 earnings report. Analysts are anticipating a positive impact from Netflix's new paid-sharing program, an initiative aimed at monetizing illicit password sharing, which saw widespread adoption during Q2 in the U.S. and other countries.
In Q1 2023, Netflix reported that its ad-supported plan in the U.S. was generating higher overall average revenue per customer (ARPU) than the $15.49/month Standard plan. This indicates that the company was earning at least $8.50/month in ad revenue per subscriber on the Standard With Ads plan.
The Standard With Ads plan allows viewing on up to two devices simultaneously, similar to the no-ads Standard plan, but it does not offer offline viewing or the option to add an extra member. The plan includes an average of 4 minutes of unskippable ads per hour.
While the majority of TV shows and movies are accessible through ad-supported plans, some content may be unavailable due to licensing restrictions. Netflix's ad-supported plans are currently available in multiple countries, including the U.S., U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, and Spain.
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