Netflix, an American subscription-based OTT platform, has declared to discontinue its lowest-priced basic plans without ads by the second quarter of 2024 lowest-priced “Basic” plan without ads in Canada and the UK, the company announced in its letters to shareholders.
This development comes amid Netflix's focus on boosting the adoption of ads-based membership and Standard plans.
“Scaling our ads business represents an opportunity to tap into significant new revenue and profit pools over the medium to longer term. In Q4‘23, like the quarter before, our ads membership increased by nearly 70% quarter over quarter, supported by improvements in our offering (e.g., downloads) and the phasing out of our Basic plan for new and rejoining members in our ads markets,” the company announced further.
The ads plan now accounts for 40 per cent of all Netflix sign-ups in its ads markets. “We’re looking to retire our Basic plan in some of our ads countries, starting with Canada and the UK in Q2 and taking it from there. On the advertiser side, we continue improving the targeting and measurement we offer our customers,” it added.
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Last year the streaming giant, Netflix announced that a gradual phasing out in certain regions including the US, UK, Italy, and Canada led to increased adoption of ads and Standard plans. The company announced the same strategy for countries including, Germany, Spain, Japan, Mexico, Australia, and Brazil.
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By retiring the Basic plan, Netflix may aim to streamline its subscription options and concentrate on driving growth and engagement through its ads business. This move could also align with the company's broader goal of optimizing its pricing and plans strategy to capture the value created by its service.
Netflix Q4 result
Streaming giant Netflix released its Q4 earnings on January 23 and reported a significant increase in subscriptions which touched a whopping 13.1 million in December 2023. This is the biggest jump, the OTT platform witnessed in one quarter since 2020 and seems to be the result of its crackdown against password sharing. Netflix took a contentious decision in 2023 by discontinuing the practice of permitting users to share passwords with individuals not residing in the same household and the practice is not going to end anytime soon.
“In Q4‘23, like the quarter before, our ads membership increased by nearly 70 per cent quarter over quarter, supported by improvements in our offering (e.g., downloads) and the phasing out of our Basic plan for new and rejoining members in our ads markets,” it further added.
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First Published:
25 Jan 2024, 10:47 AM IST
Business NewsCompaniesNewsHere is why Netflix is phasing out lowest priced basic plans in Canada, UK
