Netflix will scrap its cheapest advertisement-free subscription plan for all customers, the streaming giant announced on Thursday, just one year after the company—which once swore off advertisements—eliminated the option for new customers, marking the latest price hike in the ongoing streaming wars.
Key Takeaways
- Netflix will phase out its $11.99 per month basic plan in the U.S. and France for all customers, the company announced in a Security and Exchange Commission filing, forcing subscribers to opt into a more expensive plan with the company if they want to keep their subscriptions.
- The move means existing subscribers on the basic plan can now switch to Netflix’s Standard plan ($15.49 per month), which includes ad-free movies and TV shows for up to two devices at a time for up to two account members, or its Premium Plan ($22.99), which boasts up to four simultaneous devices for up to three account members.
- Customers also have the option of opting into Netflix’s $6.99 per month Basic plan with ads.
- With the elimination of its basic plan for all U.S. customers, Netflix has entirely gutted its cheapest ad-free tier, one year after it eliminated the plan for new—and not existing—customers in the U.S. and U.K., and 13 months after it removed the option for customers in Canada.
Key Background
Streaming providers have increasingly turned to advertising revenue and price hikes as a means to stay profitable facing mounting competition from streaming rivals. Paramount+, the streaming service run by CBS owner Paramount Global, was the most recent to do so, announcing last month it would raise the monthly price of its Paramount+ with Showtime by $1 to $12.99, and to $7.99 for its plan with ads. Warner Bros.’
Max (formerly HBO Max) also increased its prices this year to $16.99 per month for ad-free streaming and $20.99 for its plan without ads, joining NBC’s Peacock ($7.99 with ads, $13.99 without). In another move aimed at increasing subscriptions, Netflix also started cracking down on password sharing, a customer loophole that had hindered the company for years, saying it would be limiting U.S. users to a single household.
Big Number
277.65 million. That’s how many subscribers Netflix reported on Thursday, outpacing rivals Disney+, Peacock and Max.
This article was first published on forbes.com and all figures are in USD.
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