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Netflix drops “Basic” ad-free plan for new customers

A smart television set running the Netflix application.
A smart television set running the Netflix application. (Stock image via Pixabay, Graphic by The Desk)

Netflix has dropped its “Basic” plan for customers in the United States and the United Kingdom as part of an apparent push to get subscribers to take its low-priced, ad-supported tier of service.

The move comes about a month after Netflix pulled the same plan from its service in Canada, where it also offers an ad-lite tier of service that offers budget-conscious consumers a way to access its content of television shows and movies for a low price.

New customers in the United States now have three plans to choose from: “Standard with Ads,” which costs $7 a month; “Standard,” a commercial-free tier that costs $15.50 a month; and “Premium,” which unlocks ultra-high definition video and other perks for $20 a month. Subscribers in the United Kingdom have a similar slate of options at varying price points.

Existing subscribers to Netflix’s Basic plan will be allowed to remain on that tier for a while longer. That includes Netflix streamers who subscriptions are subsidized by T-Mobile and other third parties. It isn’t clear how long those subscribers will be grandfathered in to the Basic plan before they are asked to switch.

The push to get customers on its ad-supported plan comes as Netflix has struggled to grow its subscriber base in the United States and Canada over the last few financial quarters. The company is also seeking to improve its average revenue per user, or ARPU, with advertising revenue seen as one way to accomplish this goal.

Netflix is expected to update its quarterly revenue and global subscriber figures Wednesday afternoon.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).