The pursuit of shareholder satisfaction led Netflix to eliminate its cheapest ad-free package, leaving users to choose between spending more money or spending more time watching ads. In the summer of 2023, Netflix stopped letting new users sign up for its ad-free "Basic" plan, just before its ad-tiered rollout. At the time, Netflix wasn't taking any action against existing subscribers, but that will change in 2024.
Netflix announced the news when it released its earnings report. Starting in the second quarter of 2024, the ad-free basic package will be phased out entirely starting in the UK and Canada, followed by the US and other countries.
The move is intended to drive users to subscribe to more profitable content. They'll have to choose between paying $15.49 for 1080p ad-free content, or $6.99 for ad-supported content.
Netflix's statement on the changes:
In Q4 '23, as in the previous quarter, our advertising memberships increased nearly 70% sequentially, driven primarily by improvements to our products such as downloads and the phase-out of the "Basic Plan" for new and rejoining members in the advertising market.
In our ad markets, where ad plans currently account for 40% of all Netflix sign-ups, we are considering eliminating the basic package in some ad countries, starting with Canada and the UK in the second quarter and phasing out later.
Netflix keeps raising prices and changing subscription packages to ensure it gets the most profit from the content it buys. But like the cable giants Netflix hopes to topple, it's approaching the dangerous threshold of having thousands of channels and no content to watch.
Netflix also announced a 10-year deal with WWE to air "Monday Night RAW." Time will tell how much impact this deal will have on consumers when Netflix inevitably raises prices again.