Netflix has stated that it will discontinue their cheapest ad-free package internationally very soon, which has enraged me.
Netflix revealed in its Q4 2023 earnings report, which was posted yesterday (January 23), that it plans to “retire” its Basic tier beginning in Q2 2024. Since July 2023, US consumers have been unable to sign up for the Basic plan, but Netflix now wants to eliminate it as an option in additional countries, beginning with the UK and Canada.
The streamer has not announced a specific date for the Basic tier’s demise in these countries, nor has it indicated which countries would be affected next. I’ve contacted Netflix, one of the world’s greatest streaming services, for explanation I’ll update this piece if I hear back.
Why is Netflix discontinuing its Basic plan?
The only reason Netflix is discontinuing its cheapest ad-free option is because of commercials. Netflix’s ad-supported plan, which went live in November 2022, was predicted to be a flop, with analysts predicting that customers would vote with their wallets and refuse to join up for a plan that required them to wait through four-minute ad breaks for every hour they watched.
However, Netflix has made its critics eat their words. Netflix With Ads has grown from strength to strength, with 15 million subscribers in the first year of its launch (according to a Netflix press release). Netflix reported earlier this month that the amount had risen by eight million since November 2023, a huge increase that contributed considerably to the 13 million additional customers gained in Q4 2023. Netflix currently has 260 million subscribers, with 40% of new customers opting for its ad-supported tier.
Given the popularity of its advertising campaign, Netflix’s choice to implement it has paid off – literally. Its income sources have never been more healthy, its profit margins are increasing, and its senior team is basking in the light of a successful groundbreaking job. What’s the point of breaking new ground? Because every other big streaming service, including Disney Plus, Max, and Prime Video, has now followed suit with their own ad-supported offerings.
With its ad plan dramatically increasing its revenue, it’s no surprise that Netflix intends to discontinue its cheapest ad-free tier and make Netflix With Ads the default membership choice for people on a tight budget – and it’s this shift away from its ad-less plan that has irritated me.
A scheduled cancelation
Netflix’s move to discontinue its cheapest ad-free service is commercially sound. Netflix’s shareholders want it to generate money, so it will entice new customers to sign up for its more expensive tiers (the Standard and Premium plans) or the most popular, or its ad-based tier.
However, as a Basic user in the United Kingdom, I do not want to be compelled to move to any of the options listed above. I don’t want to sit through advertisements while watching one of the best Netflix episodes or documentaries; I can do it on ITV, Channel 4, or any number of ad-supported Freeview channels instead.
Similarly, I don’t see the sense in upgrading to the Standard or Premium tier if I’m in the mood to watch one of the best Netflix movies. If I’m the only one using Netflix, I don’t need to stream it on two different devices (one of the benefits of these levels), nor do I care about downloading films or shows to watch offline. I exclusively watch Netflix at home, thus I don’t see the latter as an added benefit. The Premium plan’s frills, such as spatial audio and/or ultra HD, do not appeal to me.
I’m satisfied with my Netflix Basic plan and don’t want to upgrade to a higher tier because Netflix says so. And, frankly, Netflix suggests that It will raise costs across the board once more – “we’ll occasionally ask our members to pay a little extra to reflect those improvements,” according to its most recent financial report – and the ad-based tier will soon be as pricey as the Basic one. I guess I’ll have to follow in the footsteps of other angry Netflix subscribers and either cancel my subscription or go subscription-hopping throughout 2024.
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