Netflix starts abolishing its cheapest ad-free plan in the US, and users will be automatically moved to the 'cheapest plan with ads'

Netflix offers multiple paid plans, including an ad-free 'Basic Plan' that allows you to watch Netflix in 720p (HD) resolution (only on one device) overseas. Netflix will discontinue the Basic Plan in January 2024 , and in July it was discontinued in the UK and Canada . Netflix is accelerating this trend, and it has become clear that it is trying to transition basic plan subscribers to a 'cheap ad-supported plan' in the US as well.

Netflix is kicking US subscribers off its cheapest ad-free plan soon | Ars Technica
https://arstechnica.com/gadgets/2024/07/netflix-is-kicking-us-subscribers-off-its-cheapest-ad-free-plan-soon/

In a letter to shareholders, Netflix announced that it will phase out its basic plan, which allows users to watch Netflix without ads, in the United States and France. This means that the cheapest ad-free plan offered in the United States will be the Standard Plan. The Standard Plan allows users to watch Netflix without ads in 1080p (Full HD) resolution on up to two devices. The price is $15.49 (about 2,400 yen) per month.

According to Netflix, the basic plan, which costs $7 (about 1,100 yen) per month, is the most popular plan, accounting for more than 45% of new subscribers. Netflix believes that by eliminating the basic plan, more users will use the ad-supported plan, which will increase the number of ad plays and increase the company's revenue.

In fact, since Netflix discontinued its basic plan, the number of subscribers to its ad-supported plans has been steadily increasing.

Netflix's monthly active users on ad-supported plans have increased 8-fold in one year - GIGAZINE

Netflix believes that advertising will become increasingly important to the company in the future, stating that it 'is on track to achieve key ad-supported subscriber milestones that are important to advertisers in countries where we offer ad-supported subscriptions in 2025, building a strong foundation to further grow ad-supported subscribers in 2026 and beyond.'

In Japan, new applications for the basic plan were stopped in October 2023 and a price increase was implemented.

Netflix raises prices again, new basic plan subscriptions will soon be suspended - GIGAZINE

Netflix is not the only video streaming service that continues to raise prices. Price hikes have been implemented repeatedly across the industry, and the underlying causes are explained in the following article.

Why do streaming service subscriptions continue to increase in price? - GIGAZINE

Competitors are trying to differentiate themselves by offering great deals that combine streaming services with other services, but the sheer number of these services means streaming services are facing high cancellation rates, technology media Ars Technica points out.

On the other hand, Netflix has stated that while it may partner with cable TV, mobile providers and device manufacturers to sell Netflix together with other services, it will not sell multiple streaming services as a bundle like Disney+. Netflix argued that 'Netflix is already the go-to destination, and there is limited profit to be made by bundling it with other streaming services.'

Netflix announced that it recorded 8 million new subscribers in the second quarter of 2024. According to Netflix, the number of paid subscribers at the time of writing was 278 million, up 16.5% from the same period last year, making it the video streaming service with the largest number of subscribers. However, it has been pointed out that the growth in new subscribers slowed in the second quarter of 2024.