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Netflix kills Basic plan in U.S., U.K. as ads bring in more revenue

The Netflix logo in app.
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Netflix has pared down its subscription options, starting with accounts in the U.S. and U.K. As noted by U.K. site CordBusters, the $10-a-month Basic plan is no more, at least for new subscribers. That option got you the ability to watch ad-free on a single device,  limited to 720p resolution.

The move isn’t unprecedented — Netflix quietly did the same thing in Canada in June. On its pricing page, Netflix says that the change affects new and returning members. Current subscribers of the Basic plan can keep it “until you change plans or cancel your account.”

Remaining are three plans, and their prices remain unchanged.

  • Standard With Ads: $7 a month for up to two devices at once, up to 1080p resolution. Some content not available on this plan.
  • Standard: $15.50 a month for up to two devices at once, up to 1080p resolution, the ability to download offline on two devices, and the ability to pay for one extra member who doesn’t live with you.
  • Premium: $20 a month for up to four devices at once, up to 4K UHD resolution. Can download offline on up to six devices, and has the ability to pay for up to two extra members who don’t live with you. Includes support for spatial audio.

The changes streamline the Netflix pricing options, and they also might actually make the decision between a plan with ads and a plan without just a little easier for viewers. The $3 difference between the Standard With Ads plan and the retired Basic plan marked a 43% delta, while the new scheme has a 122% difference between Standard With Ads and Standard.

It also makes sense from Netflix’s point of view. The streamer makes more revenue per member on the $7-a-month plan with advertising than it does on the $10-a-month plan without ads. In its first-quarter 2023 letter to shareholders, Netflix noted that “our ads plan already has a total [average revenue per member] greater than our standard plan.” And it telegraphed further pricing changes, too. “We want to be more sophisticated around pricing so that we offer a range of price points and feature sets to suit consumers’ differing needs.”

Netflix announces its Q2 2023 earnings this afternoon.

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