Netflix Removes Popular Streaming Plan Forcing Members To Pay More
Last year, Netflix lost almost a million subscribers, and this affected the streamer’s stock value and sent the company scrambling to find new ways to shore up revenue. One of the earlier examples of this was the unpopular move of cracking down on password-sharing, something the company once encouraged via social media. According to The Hollywood Reporter, Netflix has taken another bold step to drive revenue up by eliminating the ad-free “Basic” plan, forcing new subscribers to go with more expensive options if they’d like to avoid seeing any commercials.
Netflix is removing its Basic no ads plan for new subscribers, forcing them to pay at least $15.49 per month to watch without commercials.
Netflix has many different tiers for subscribers to choose from, and this previously included a $9.99 “Basic” plan with no ads — this was the next step up from the “Standard with ads” tier. Now, new subscribers who go to the Netflix website can only choose from three options: “Standard with ads” for $6.99, “Standard” for $15.49, and “Premium” for $19.99.
The latter two options are both ad-free, but in removing the “Basic” option, Netflix has ensured that new subscribers must pay over fifty percent more than they once did to simply stream without commercials.
If you are currently subscribed to that Basic plan, Netflix did have some good news: for the foreseeable future, the streaming giant will let current Basic subscribers continue to pay for that plan at the previous rate. For the moment, that means that only new or returning subscribers will have to worry about paying the higher cost for streaming without ads.
If a current Basic subscriber lets their subscription lapse, though, or upgrades to another tier, they will not be able to return to the Basic tier and price they enjoyed before.
When Netflix launched its lowest-priced “Basic with ads” tier late last year, it proved controversial to some critics and users who believe that the primary appeal of streaming in the first place is not having to put up with commercials. Despite the criticism, though, Netflix’s new tier did a good job of helping the streamer gain new subscribers.
If you are currently subscribed to that Basic plan, Netflix did have some good news: for the foreseeable future, the streaming giant will let current Basic subscribers continue to pay for that plan at the previous rate.
In May, Netflix revealed that this ad-based tier has over five million active users each month, and while “active user” isn’t the same as “subscriber” (for example, one family account may have multiple users), it’s reasonable to assume that this ad-based tier gave the streamer a much-needed injection of new subscriptions.
Furthermore, Netflix revealed that the Basic with ads tier has just as much engagement as the ad-free tiers, meaning that the company is making plenty of money from the sheer amount of ads being watched by subscribers.
This is likely why Netflix got rid of the ad-free Basic tier: if new subscribers go for the Standard with ads, the streamer makes more money from advertisements, and if they go for the pricier Standard package, the streamer makes more money from subscriptions. Either way, Netflix wins.
Netflix Wins
In fact, “Netflix wins” is rapidly becoming a mantra in the streaming world. After losing subscribers for the first time last year and then getting backlash for cracking down on password-sharing, it looked like Netflix might be knocked off its streaming throne.
Now, though, with an increase in subscribers and an influx of once-exclusive content from Max (a streamer that keeps removing beloved content due to financial woes), Netflix is once more back on top of the streaming world.
