Why Netflix Is Cutting Its Cheapest No-Ad Plan & How It Affects You
Your Netflix plan could change.
Variety says that Netflix is getting rid of its cheapest, no-advertisement streaming plan. This move will only affect new subscribers in the United States and the United Kingdom. Canada got rid of their cheapest, basic plan earlier this year. The intention is to move these subscribers over to Netflix's cheap, ad-supported service, which launched in late 2022.
The basic plan only allows viewers one stream, meaning users in the same household can't watch different movies or TV shows at the same time. The basic no-ad plan came in at a monthly cost of $9.99 in the United States or £6.99 in the United Kingdom. If you're currently on the basic plan, you have no reason to worry, as Netflix tells Variety that you can "remain on this plan until you change plans or cancel your account." At this time, new subscribers, or those interested in rejoining the service, won't be able to get in on the basic plan.
The cheapest plan Netflix offers, with ads, costs $6.99 a month in the United States, or £4.99 in the United Kingdom. While this is certainly cheaper than the basic plan, it does come with the caveat of having to watch advertisements. Netflix tells Variety that their ad-supported plans "are lower than the competition and provide great value to consumers given the breadth and quality of our catalog..." Note that most, but not all titles are available on the ad-supported tier.
For Netflix, the ad-supported plan has been a boon. Nearly 5 million subscribers have signed up for the ad experience since the option launched in 2022, per Reuters. With the basic plan slowly being phased out in key markets, new value-conscious subscribers will have to consider watching Netflix with ads.
The ad-supported plan is a profitable move for Netflix
The good news is, if you're currently subscribed to the basic, ad-free Netflix service, you have nothing to worry about. The cheap, ad-free plan is no longer available for new subscribers in Canada, the United States, and the United Kingdom. The bad news is, should you cancel your Netflix plan, you won't be able to re-subscribe to the old basic, ad-free plan. With this change, the cheapest, no-ad tier is the standard plan, which costs $15.49 in the United States. This plan allows two users in the same household to stream simultaneously in HD.
Netflix clearly wants viewers to pivot to the ad-supported plan. At $6.99, it's certainly not a poor value, allowing two users in the same household to simultaneously watch different content. On its Help Center, Netflix says that viewers can expect around four minutes of advertisements per hour. Ads play before and during programming, except when it comes to new movies — those only have commercials at the beginning.
Netflix is expanding fast with its ad-supported plans, having launched them in key markets like Brazil, France, Mexico, and Australia. With ad-supported plans, Netflix is able to generate more revenue per customer, revealing during their Q1 2023 earnings that the $6.99 ad-supported was far more profitable than the $15.49 standard plan. Netflix isn't the only streaming service with an ad-supported plan, as companies like Max and Peacock also boast lower-priced streaming tiers with commercials.