The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan

By Mighty Travels Premium May 15, 2024 9:46 AM UTC

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - The End of Netflix's Ad-Free Basic Tier

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Netflix's ad-free Basic plan is being phased out, with the change first rolling out in the UK and Canada.

The streaming giant's cheapest ad-free option will now be the $15.49 Standard tier, a significant increase from the previous $9.99 Basic plan.

This move aligns with Netflix's strategy to compete in the growing ad-supported streaming market, as the company seeks to drive revenue growth and remain competitive in the saturated subscription landscape.

The retirement of Netflix's ad-free Basic tier is part of the streaming giant's strategy to compete in the growing ad-supported video-on-demand (AVOD) market.

By phasing out the cheapest ad-free option, Netflix aims to drive more subscribers towards its ad-supported plan or the pricier ad-free tiers.

The change will roll out first in the UK and Canada, where Netflix's ad-supported plan is already available, as the company focuses on markets where it can offer both ad-free and ad-supported options.

Netflix's decision to retire the Basic plan is driven by the growing popularity of its ad-supported tier, which accounted for 19% of new sign-ups in June 2023, up from 10% in November 2022, indicating a shift in consumer preferences.

The move to phase out the Basic plan is also part of Netflix's broader strategy to increase average revenue per user (ARPU) and improve profitability, as the company faces increasing competition from other streaming services.

While the retirement of the Basic plan may disappoint some price-sensitive customers, Netflix believes that the availability of its ad-supported tier and the higher-priced ad-free tiers will better align with the evolving preferences and budgets of its subscriber base.

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - Streaming Service's Strategic Move Towards Ad-Supported Models

Streaming services are increasingly embracing ad-supported models to balance their financial strategies.

Netflix has retired its ad-free basic plan, a strategic move towards incorporating ads into its service.

This shift is not limited to Netflix, as other major platforms like Disney+ and HBO Max have also introduced ad-supported tiers.

The rise of free ad-supported streaming TV (FAST) and the growing preference for ad-supported content, especially among younger audiences, are driving this industry-wide trend.

As ad spending on connected TV is expected to surge, streaming services are adapting to cater to changing viewer preferences and unlock new revenue streams.

Streaming services are increasingly embracing ad-supported models as a way to drive revenue growth and remain competitive in the saturated subscription landscape.

Netflix's decision to retire its ad-free Basic plan is a significant shift, as the company aims to steer more subscribers towards its ad-supported plan or the pricier ad-free tiers.

The rise of free ad-supported streaming TV (FAST) has been on the rise, and ad spending on FAST is expected to increase, reaching $09 billion in

A study showed that 55% of Gen Z adults utilize streaming TV services via subscriptions owned by others, and they are open to ad-supported content, highlighting the potential for ad-supported models to reach new audiences.

The shift towards ad-supported models is not limited to Netflix, as other major streaming services, such as Disney+ and HBO Max, have also introduced ad-supported tiers to their offerings.

The introduction of ad-supported tiers can unlock a massive amount of new inventory for streaming services, allowing them to adapt to changing viewer preferences and balance their financial strategies.

While the retirement of Netflix's ad-free Basic plan may disappoint some price-sensitive customers, the company believes that the availability of its ad-supported tier and the higher-priced ad-free tiers will better align with the evolving preferences and budgets of its subscriber base.

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - Pricing Adjustments - Standard and Premium Plans Remain

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Netflix has retired its cheapest ad-free basic plan, which previously cost $11.99 per month.

However, the streaming giant's slightly more expensive ad-free Standard and Premium plans, priced at $15.49 and $22.99 per month respectively, remain available for subscribers who prefer an ad-free viewing experience.

The new ad-supported basic plan is offered at a lower price point of $7 per month, providing a more affordable option for budget-conscious consumers.

The ad-supported Basic with Ads plan from Netflix offers 720p HD video quality, lower than the ad-free Standard and Premium plans.

Subscribers of the Basic with Ads plan will not be able to download series and films for offline viewing, a feature available on the ad-free tiers.

Netflix has confirmed that approximately 5-10% of its library will be unavailable to ad-supported subscribers due to licensing restrictions.

The ad breaks on the Basic with Ads plan are limited to 4-5 minutes per hour, appearing both before and during programming.

Disney Plus will start charging $8 per month for its ad-supported subscription and $11 per month for its ad-free membership, effective December 8th.

The ad-free Standard plan from Netflix costs $49 per month, while the Premium plan costs $99 per month, both higher than the previous Basic plan.

Netflix's ad-supported Basic with Ads plan is priced at $99 per month, significantly lower than the ad-free Standard and Premium options.

The retirement of the ad-free Basic plan is part of Netflix's strategy to drive more subscribers towards either the ad-supported tier or the higher-priced ad-free tiers, as the company seeks to remain competitive in the saturated subscription landscape.

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - Existing Customers Face Upgrade or Downgrade Decisions

Existing Netflix customers face the decision to either upgrade or downgrade their plans as the streaming giant retires its ad-free Basic tier.

While the ad-supported Basic plan is now the cheapest option at $7 per month, the ad-free Standard and Premium plans remain available at $15.49 and $22.99 respectively.

This shift aligns with Netflix's strategy to compete in the growing ad-supported streaming market and drive revenue growth.

Existing Netflix subscribers will be able to keep their current ad-free Basic plan, but will now have the option to switch to the new ad-supported tier.

The new ad-supported Basic plan from Netflix offers 720p HD video quality, lower than the 1080p HD quality on the ad-free Standard and Premium plans.

Subscribers of the ad-supported Basic plan will not have the ability to download content for offline viewing, a feature available on the ad-free tiers.

Netflix has confirmed that approximately 5-10% of its content library will be unavailable to ad-supported subscribers due to licensing restrictions.

The ad breaks on the ad-supported Basic plan are limited to 4-5 minutes per hour, appearing both before and during programming.

Disney+ will introduce an ad-supported tier priced at $8 per month, while the ad-free membership will cost $11 per month, starting December 8th.

The ad-free Standard plan from Netflix is priced at $49 per month, while the Premium plan costs $99 per month, both significantly higher than the previous $99 Basic plan.

The new ad-supported Basic plan from Netflix is priced at $7 per month, making it the most affordable option for budget-conscious consumers.

According to Netflix's data, 80% of ad-supported viewing happens through a TV, and 70% of ad plan members are aged 18-49, with a median age of

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - Netflix's Ad Business Ambitions Fuel Plan Restructuring

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Netflix's ad-supported streaming plan has gained significant traction, reaching over 23 million monthly active users.

The company has restructured its pricing plans, retiring the ad-free basic tier and focusing on its ad-supported offering, which now accounts for a larger share of new sign-ups.

This strategic shift aligns with Netflix's ambitions to build a robust advertising business and compete in the growing ad-supported streaming market.

Netflix's ad-supported plan has already gained significant traction, with over 23 million monthly active users globally, indicating a growing demand for more affordable streaming options.

The ad-supported plan has attracted a predominantly young audience, with over 70% of subscribers aged 18-49 and a global median age of just 34, highlighting its appeal to younger generations.

Remarkably, ad-supported viewers on Netflix are four times more likely to engage with the advertisements compared to other streaming services, suggesting a higher level of viewer attention and receptivity.

Netflix's ad-supported tier generated higher average revenue per user than its Standard ad-free plan in Q2 2023, implying over $85 million in revenue potential for the company.

Despite the popularity of the ad-supported plan, Netflix has now retired its ad-free Basic plan, a strategic move to focus more on growing its ad-supported subscriber base.

One key feature of the ad-supported plan is the ability to download content for offline viewing, which was initially removed but has now been reintroduced, addressing customer feedback.

The elimination of the ad-free Basic plan is expected to help Netflix boost its advertising business as it competes in the rapidly evolving streaming landscape.

Netflix's ad-supported plan has already attracted nearly 5 million monthly active users globally, demonstrating the growing appeal of more affordable, ad-funded streaming options.

The retirement of the ad-free Basic plan is part of Netflix's broader strategy to increase average revenue per user (ARPU) and improve profitability, as the company faces increasing competition from other streaming services.

The Rise of Ad-Supported Streaming Netflix Retires Its Ad-Free Basic Plan - Navigating the Evolving Streaming Landscape - Choices for Viewers

The evolving streaming landscape offers viewers a diverse range of options, with platforms increasingly adopting ad-supported tiers to balance their financial strategies.

While some viewers may initially resist ads, the abundance of streaming choices allows consumers to select services that align with their preferences and budgets.

As the ad-supported streaming model gains popularity, viewers must navigate this changing landscape and decide whether to opt for ad-free or ad-supported plans based on their individual needs and preferences.

The introduction of more affordable, ad-supported options provides budget-conscious consumers with additional choices, though the trade-off may be a slightly compromised viewing experience.

The average ad load for ad-supported streaming services is still relatively low, currently around 4-5 minutes per hour, but it is expected to gradually increase over time.

Netflix's ad-supported Basic with Ads plan offers 720p HD video quality, lower than the 1080p HD quality on the ad-free Standard and Premium plans.

Subscribers of the ad-supported Basic plan will not be able to download series and films for offline viewing, a feature available on the ad-free tiers.

Netflix has confirmed that approximately 5-10% of its content library will be unavailable to ad-supported subscribers due to licensing restrictions.

Disney+ will start charging $8 per month for its ad-supported subscription and $11 per month for its ad-free membership, effective December 8th,

The ad-free Standard plan from Netflix costs $49 per month, while the Premium plan costs $99 per month, both significantly higher than the previous $99 Basic plan.