Netflix To Discontinue Base Ad-Free Plan, Pushing Users to More Expensive or Ad-Supported Options

Netflix is discontinuing its $11.99 ad-free plan on July 13, pushing users to choose between a $6.99 plan with ads, a $15.49 ad-free plan, or a $22.99 ad-free 4K plan. Notifications on the platform inform users that their "basic plan has been discontinued" and they need to select a new plan to continue streaming. The move is reportedly being tested first in the UK and Canada, with potential expansion to other regions, including the U.S. Some users have reported on Reddit that they are unable to watch shows on their current ad-free plans without switching to the new pricing structure.

The decision has sparked dissatisfaction among some subscribers, who feel the new options force them into either a low-cost ad-supported plan or a significantly more expensive ad-free tier. Critics argue that Netflix is not addressing the needs of middle-class viewers, creating a divide between "poverty-class" ad-supported viewers and "wealthy-class" members. Some users have openly stated they are canceling their subscriptions due to the rising costs.

This strategic shift aligns with Netflix's earlier announcements during its Q4 earnings call, where the company expressed intentions to push customers towards more expensive or ad-supported plans to boost revenue. Netflix highlighted that scaling its ads business presents an opportunity for significant new revenue and profit in the medium to long term. The company aims to improve its targeting and measurement for advertisers.

Despite the price hikes and subscriber dissatisfaction, Netflix's membership numbers have continued to grow. According to CNBC, Netflix saw a 16% increase in memberships in the first quarter of 2024, reaching 269.6 million. The company also reported a net income of approximately $2.33 billion for the same period. This growth indicates that, while some users are unhappy with the changes, Netflix remains a dominant player in the streaming market.