Netflix intends to remove its ad-free basic subscription plan from certain countries where ad-supported plans are offered, starting with Canada and the United Kingdom in the second quarter of 2024, as per TheVerge’s Emma Roth.
What is Netflix aiming for by discontinuing the ad-supported basic plan?
Greg Peters, co-CEO of Netflix, announced during an investor video interview that the company aims to expand its basic plan with ads, which currently has 23 million monthly active users. To achieve this, Netflix plans to discontinue the ad-free basic plan, upgrade the resolution to Full HD (1080p), and introduce a download feature for offline viewing.
In the fourth quarter of 2023, our ad revenue has continued to grow significantly, with a nearly 70% increase each quarter. This growth is driven by enhancements in our offerings, such as downloads, and the phased removal of the Basic plan for new and returning members in markets where the ad plan is available. The ad plan now accounts for 40% of all Netflix subscriptions in our ad markets, and we plan to phase out the Basic plan without ads in select countries, beginning with Canada and the UK in the second quarter, and expanding to other regions thereafter.
If Netflix removes its ad-free basic plan from various countries and makes it the default option, subscribers will no longer have a mid-range choice. They will either need to pay for the basic plan with ads or opt for the significantly pricier standard plan.
