Netflix has just silently retired its cheapest ad-free subscription plan, much to the surprise of subscribers in both the United States and the United Kingdom.
The once popular “Basic” tier, which was available at $9.99 (£10.99) a month, used to offer users the opportunity to enjoy all the movies and TV shows in standard definition, devoid of any interruptions from advertisements. The demise of this plan is leaving consumers with only two options: sit through ads for a cheaper rate or shell out more for an ad-free experience.
Previously, the now-defunct plan catered to both fresh users and those looking to rejoin the plan. Unfortunately, the option is no longer available for new signups, leaving only those who are already subscribed to it to continue enjoying the benefits until they decide to switch plans or cancel their account altogether.
At the moment, Netflix only offers the “Standard” plan at $15.49 (£10.99) a month, which is the cheapest ad-free option and permits two simultaneous streams. For those seeking to take their streaming experience up a notch, the “Premium” plan is priced at $19.99 (£15.99) a month and allows for four simultaneous streams along with the luxury of viewing films and TV shows in 4K Ultra HD and HDR.
Regrettably, for users striving to keep their streaming expenses at a minimum, the only alternative is sitting through ads via the “Standard With Ads” plan, offered at a modest $6.99 (£4.99) a month. This plan, although affordable, is fairly no-frills in comparison to its pricier counterparts. It restricts users from downloading films and TV shows to their devices and also entails the necessity to sit through advertisements during viewing.
The withdrawal of the ‘Basic’ tier seems to be a part of Netflix’s larger scheme of boosting its revenues via advertising. The effectiveness of this strategy is evident in the company’s rapidly growing paid membership base and accelerated revenue growth, particularly witnessed in Canada – a market that Netflix considers as a reliable indicator for the US. Moreover, The Information reports that around 1.5 million subscribers based in the United States are currently opted into Netflix’s ad-supported Standard plan.
It is, however, not sunshine and rainbows for all. A considerable chunk of consumers have expressed their displeasure over these changes. A lot of potential customers are venting their frustration on various social media sites. But, while the rumblings continue, Netflix’s revenue continues to go up.
As unfortunate as it may sound, Netflix will always follow the call that pads its bottom line. So far, its strategies appear to be working.
If nothing else, the adjustment indicates a calculated risk taken by Netflix to place its stakes on an ad-supported business model, subtly emphasizing that the future of streaming may not be entirely ad-free after all. Time will tell if the balance of value and cost maintained by the former Basic plan will be missed by users or if they will readily embrace this new chapter in the streaming giant’s journey.
All that’s left now is for Netflix to justify the added cost by introducing more, better-quality shows without coming at the expense of the cancelations of others.
