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HomeTechNetflix Eliminates Basic Plan in the US, Bets on Ad-Supported Subscriptions

Netflix Eliminates Basic Plan in the US, Bets on Ad-Supported Subscriptions

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Users have until July 13 to choose a new plan or lose access to the service.

Photo: Unsplash/Dima Solomin/Biboca Moderna

Netflix is ​​ending its ad-free basic plan in the US, according to notices sent to US users. Subscribers to the bundle will have until July 13 to choose a new subscription option or lose access to the platform altogether.

Plan Options

Users can choose the ad-supported plan (1080p) for $6.99 per month, the standard plan (1080p and no ads) for $15.49 per month, or the premium plan (1080p) for $22.99 per month.

The decision to end the ad-free basic plan has started in North America and is expected to extend to the rest of the world. In Brazil, Netflix is ​​no longer offering this option to new subscribers, but those who still have this plan can keep it for R$30.90 per month, in 720p. It's more expensive than the ad-free plan and has a worse resolution.

Currently, the options available to new Brazilian users are the Standard plan with ads for R$20.90 per month, the Standard plan for R$44.90 per month, and the Premium plan for R$59.90 per month. The main differences between the plans are the image and sound quality, the possibility of downloading and the number of users per account, without changing the catalog of movies and series.

Globally, Netflix has more than 260 million subscribers, 46 million of whom are in Latin America and Mexico.

Context and changes

Focus on the plan with ads

The focus on ad-supported plans is a big change for Netflix, which highlighted, in a report to investors, that this option already accounts for about 40% of subscriptions.

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Ironically, the company has always taken a stance against advertising in its subscriptions, a slogan reinforced by its founder Reed Hastings. However, in 2022, after a record quarterly decline in new subscribers, Netflix changed its strategy. The reason for the decline was the post-pandemic scenario and the global rise in interest rates, which forced tech companies to look for greater efficiency and profitability.

Netflix made several adjustments, including laying off employees, creating “points add-on fees,” and introducing ad-supported plans. These measures proved to be effective and inspired rivals like Amazon, Warner, and Disney to adopt similar solutions for their own streaming services.

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