Netflix has confirmed it'll phase out its cheapest ad-free plan internationally very soon – and it's an announcement that's infuriated me.
Revealed in its Q4 2023 earnings report, which Netflix released yesterday (January 23), the streaming giant declared its intention to "retire" its Basic tier from Q2 2024 onwards. US users have been unable to sign up to the Basic plan since July 2023, but Netflix now plans to remove it as an option in other countries, with the UK and Canada-based users first to be affected.
The streamer hasn't set a firm date for the Basic tier's demise in these countries, nor has it revealed which countries will be hit next. I've reached out to Netflix, one of the world's best streaming service for clarification, and I'll update this article if I hear back.
Why is Netflix shelving its Basic plan?
There's only one reason why Netflix is calling time on its cheapest ad-free tier: ads. Netflix's ad-supported plan, which it launched in November 2022, was expected to be a dud, with analysts suggesting that people would vote with their wallets and refuse to sign up to a plan that forced them to sit through four-minute ad breaks for every hour they streamed.
Netflix, though, has made its critics eat their words. Netflix With Ads has gone from strength to strength, with 15 million people subscribing in the first year since its debut (per a Netflix press blast). Earlier this month, Netflix announced that figure had jumped eight million since November 2023 – a sizable number that significantly contributed to the 13 million new users it added in Q4 2023. In total, Netflix's current fanbase stands at 260 million, with 40% of new users signing up to its ads-based tier.
Given that its ads plan is so popular, Netflix's decision to introduce such a plan has paid off – literally. Its revenue streams have never been more healthy, its profit margins are up, and its executive team is basking in the glow of a trailblazing job well done. Why trailblazing? Because every other major streamer, including Disney Plus, Max, and Prime Video, has subsequently followed suit with their own ad-supported plans.
With its ads plan bolstering its income significantly, it's no surprise to learn that Netflix plans to dump its cheapest ad-free tier, and make Netflix With Ads the default subscription option for those on a budget – and it's this move away from its ad-less plan, that's made me angry.
A planned cancellation
From a business perspective, Netflix's decision to scrap its cheapest ad-free plan makes sense. Its shareholders want it to make money, so Netflix will coax new users to sign up to its more expensive tiers (those being the Standard and Premium plans) or the one that's currently in-demand, aka its ad-based tier.
As a UK-based Basic user, though, I don't want to be forced to switch to any of the above. I don't want to sit through ads while I stream one of the best Netflix shows or best Netflix documentaries – I can do that on ITV, Channel 4, or any number of ad-supported Freeview channels instead.
Equally, I don't see the point of upgrading to the Standard or Premium tier if I'm in the mood to, say, watch one of the best Netflix movies. I don't need to stream Netflix on two separate devices (one of these tiers' perks) if I'm the only one using it, nor do I care about downloading films or series to stream offline. I only watch Netflix in my own home, so I don't see the latter as an additional benefit. As for the Premium plan's extras, spatial audio and/or ultra HD just don't appeal to me, either.
I'm happy with my Netflix Basic plan and I don't want to change to a different tier because Netflix deems it so. And, frankly, with Netflix suggesting that it'll be increasing prices across the board once more – "we’ll occasionally ask our members to pay a little extra to reflect those improvements", it says in its latest earnings report – the ad-based tier will be as expensive as the Basic one is soon enough, anyway. I guess I'll need to take a leaf out of other disgruntled users' books and either cancel my Netflix subscription or embark on a subscription-hopping journey throughout 2024...
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