Netflix Yanks Basic Ad-Free Plan, Nudging Users To Ad-Supported Tier

Netflix continues to tinker with its subscription plans, yanking its basic $9.99 ad-free offering. That leaves its new $6.99 advertising plan, its $15.49 ad-free plan and its $19.99 premium plan, according to the streamer’s sign-in page.

The move could nudge users to the cheaper ad-supported plan and doesn’t compromise the business since the vast majority of Netflix subscribers already take the $15.99 plan.

The shift comes as the company prepares to release second-quarter earnings after market close today that investors hope wil provide more data on the ad plan and other initiatives like a recent crackdown on password sharing.

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Netflix launched the ad-supported tier last November. Disney+ did the same the following month as streaming services looked to boost revenue in a crowded market. Subscriber growth slowed post-Covid even as spending on content had exploded. Wall Street’s shift to focus on profits over subs pushed media companies to pivot. Netflix — whose business, unlike other streamers, is profitable — had always been averse to advertising, until it wasn’t. At a virtual upfront presentation in May, company executives told advertising executives that the ad plan had hit 5 million monthy active users globally and that a quarter of new subscribers are opting for the tier when signing up.

“The signals are promising: engagement on our ads plan is similar to our comparable non-ads plans,” co-CEO Greg Peters said then. “That’s critical because it all starts and ends with consumers.” The exec added that there is “plenty of runway ahead of us,” citing the stat that Netflix accounts for 10% of overall TV usage even in its most-penetrated territories.

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