Netflix Reduces Availability of Lowest Priced Ad-Free Plan
Netflix has dropped its cheapest monthly plan that doesn't include ads.
The streaming giant's $9.99 Basic plan is no longer available for new customers in the United States and the United Kingdom, with existing subscribers able to stay on this plan as long as it isn't changed or canceled, the Wall Street Journal (WSJ) reported Wednesday (July 19).
Netflix did not immediately reply to PYMNTS' request for comment.
The "Plans and Pricing" page on the company's website said, as of Wednesday morning: "The Basic plan is no longer available for new or rejoining members. If you are currently on the Basic plan, you can remain on this plan until you change plans or cancel your account."
The page showed three monthly plans available: a $19.99 Premium plan, a $15.49 Standard plan and a $6.99 Standard with ads plan.
This change comes after Netflix launched its $6.99 ad-supported plan last year, according to the WSJ report. Since then, Netflix has been actively encouraging people to join it, with Netflix telling the media outlet Wednesday that "the ad-supported plans provide great value to consumers given the breadth and quality of our catalog."
Customers who have signed up for the ad-supported plan deliver more revenue to Netflix than those under the Basic or Standard plans because the company gains additional revenue from the commercials, the WSJ report said.
Netflix Chief Operating Officer Greg Peters said during an earnings call in January, shortly after the launch of the streaming service's first ad-supported plan, that the engagement from users of that plan is similar to that of the ad-free plans.
"That's really a promising indication that means we're delivering a solid experience and it's better than we modeled," Peters said at the time. "That's a great sort of fundamental starting point for us to work with."
As PYMNTS reported in April, streaming platform Hulu also offers a plan that includes commercials. As is the case with Netflix, this plan lets it maintain brand relevance with advertisers and improve its bottom line.
Hulu's ad-supported plan has proven to be popular among viewers who want to watch their favorite shows but find the ad-free plan out of reach.
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