Netflix to discontinue its cheapest ad-free plan in Canada, UK

Netflix ad-free plan: Netflix is discontinuing its most affordable ad-free tier in multiple markets, starting with Canada and the UK in Q2 2024. The decision follows the streaming giant's success with its ad-supported plan, which has witnessed a remarkable 70 per cent quarterly increase in membership and is proving more lucrative per user.

Netflix, known for its occasional price adjustments, raised eyebrows with multiple price hikes in recent years. The latest adjustment in October 2023 saw the Premium plan's price elevated to $23 per month. Concurrently, Netflix bid farewell to its Basic subscription plan in the US, replacing it with an ad-supported tier as part of the crackdown on password sharing.

During the Q4 2023 quarterly earnings call, Netflix executives shared plans to retire the Basic ad-free tier in markets where the ad-supported plan is available. Canada and the UK are set to experience this change in Q2 2024, with a gradual expansion to other countries.

The streaming service ceased new subscriptions to the Basic plan in the US, UK, and Canada in 2023. Priced at $10 a month initially, it was later increased to $12 in October 2023. Following the retirement of this tier, the most economical option for ad-free content on Netflix will be the $15.49 monthly plan, providing HD streaming on two devices and offline downloads.

The success of the ad-supported plan, priced at $7/month, is evident in its higher revenue per user and the notable 70 per cent increase in membership during Q4 2023. Surprisingly, the ad-supported tier now constitutes 40 per cent of Netflix's total sign-ups in markets where it is available, contributing significantly to the streaming service's global user base of 247 million paid subscribers.

In a video interview, Netflix's co-CEO, Greg Peters, disclosed that the ad-supported tier boasts 23 million monthly active users, underscoring the company's commitment to "scale" it as a top priority.