Netflix is ​​betting on the cancellation of the Basic plan and plans another price increase in the future

Final cancellation of the Master Plan Netflix, the cheapest option without ads (7.99 euros per month), is getting closer. The streaming platform tested its removal in Canada last July, then did the same in the US and UK, and at the end of October announced its “gradual” removal in Spain and five other countries. In fact, in our country it is no longer available to new subscribers, although those who were infected with it before its closure can still use it.

Well, Netflix now intends to cancel their Basic plan in all countries where the ad-supported plan is implemented, as they want to promote the latter. This means that at the time of its cancellation, customers on the Basic plan will no longer have it and will have to choose between the Standard plan with ads (currently priced at €5.49 per month in Spain) and the Standard plan. (12.99 euros per month) or “Premium” (17.99 euros per month) if they want to continue enjoying Netflix content.

The company made its intentions public following the release of its fourth-quarter 2023 earnings report, which benefited its interests. The ad-supported plan accounts for 40% of all OTT subscriptions in markets where the plan is available, according to Variety, based on Netflix data. He also points out thatSubscribers to plans with advertising grew by almost 70% quarter-on-quarter quarter since launch, recently surpassing 23 million monthly unique users.

Phase out starting this year

These numbers prompted Netflix to remove the basic ad-free plan in countries where the ad-supported plan is available. Canada and the UK will undergo final exit in the second quarter of 2024, and “from there” more territories will be addedas the streaming service told its shareholders.

For Greg Peters, co-CEO of Netflix, customers get an ad-supported plan with “better plan than basic, more streams, higher resolution downloads.” “And, of course, the real benefit is that you have access to all these incredible stories at a lower real cost,” he defends in his letter to investors.

The manager also shows the position of the red “N” in the face of movements such as Amazon Prime Video, which will begin including advertising by default on its services in the US, UK, Canada and Germany starting January 29. “Given our long history of not advertising, we thought it would be better for our customers, rather than forcing them to change and offering them advertising, to attract them to the plan by advertising to those who want it based on its benefits.” , Peters says.

New price increase in the future

Elsewhere in his explanation, as reported by Deadline, the Netflix co-CEO is satisfied with the company’s current strategy, both in terms of bill-sharing and ad-supported plans. In fact, he believes that working on both fronts “will create a more efficient mechanism for translating all of (Netflix’s) value into revenue growth and will drive greater conversion of our market in the coming years.”

To achieve this goal, Peters envisions that in the future there will be a new increase in subscription prices, although without specifying when and for how much. “As we invest in and improve Netflix, we sometimes ask our members to pay a little more to reflect those improvements, which in turn will help drive a positive flow of additional investment to further improve and grow our service.”