Netflix says it will phase out its low-cost, advertisement-free “Basic” plan in the United States and France, after taking the same approach to the budget tier of service in France and the United Kingdom earlier this year.
The move is intended to push cost-conscious streamers toward the new low-cost option, called Netflix with Ads, which costs around $8 per month and offers access to Netflix’s catalog of originals and licensed TV shows and films that are peppered with commercial interruptions.
Netflix retired the ad-free Basic plan last year, but allowed existing customers who subscribed to the tier to continue receiving it. A short time after sunsetting the plan, some third parties that had previously offered the Basic plan for free — including T-Mobile — changed their promotions to include Netflix with Ads instead.
Within the next few weeks, Netflix will notify all remaining Basic subscribers in the U.S. and France that they will need to switch to Netflix with Ads if they want to maintain their service at $8 per month. If they prefer commercial-free streaming, those customers will have the option to purchase Netflix Standard, which costs $15.50 per month.
The company is hoping frugal customers who want low-cost access to Netflix’s catalog of content will purchase the $8 per month tier, which will allow the company to generate revenue off those subscribers in two ways — through the monthly fee and through advertising sold against content. Those who want uninterrupted streaming will have to pay more for the privilege.
Netflix said similar moves in the U.K. and Canad “has increased our ads member base by 34 percent sequentially” during the second quarter of 2024 (Q2 2024).
Last week, the company reported its global subscriber base grew by 8 million paying customers, most of which are taking advantage of the ad-supported tier of service.
Netflix said it earned $9.56 billion during Q2 2024, up 17 percent from Q2 2023. The figure was higher than the consensus estimate from Wall Street analysts, and slightly more than the $9.49 billion Netflix itself had projected for Q2.
