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.
What is Netflix’s intention in discontinuing the ad-supported basic subscription 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. Their priority is to grow this segment by discontinuing the ad-free basic plan, enhancing the resolution to Full HD (1080p), and introducing a download feature for offline viewing.
In the fourth quarter of 2023, our ad revenue continued to grow significantly, driven by enhancements in our offerings and the phased-out Basic plan for new and returning members in markets with the ad plan. The ad plan now accounts for 40% of all Netflix subscriptions in our ad-supported markets, and we plan to discontinue the Basic plan without ads in select countries starting with Canada and the UK in the second quarter.
If Netflix discontinues its ad-free basic plan in various countries and makes it the standard option, subscribers will no longer have a mid-tier choice. They will either need to pay for the basic plan with ads or upgrade to the significantly pricier standard plan.
