Netflix Ends Ad-Free Basic Plan in the US – Entertainment

Netflix is ​​ending its free, ad-free plan in the United States, according to notifications sent to American users. This information was confirmed by technology site The Verge on Tuesday, 2.

Existing subscribers to this bundle in the US will have until July 13 to change their choice or lose access to Netflix altogether. The remaining options are the plan with ads (and 1080p), for $6.99 per month; the standard plan (1080p and no ads), for $15.49 per month; and the premium plan (4K) for $22.99 per month.

In Brazil, subscribers have three plans: Standard with ads (R$20.90 per month), Standard (R$44.90) and Premium (R$59.90 per month). The differences between the plans are in the quality of the image and sound, the possibility of downloads and the number of users per account. There is no difference in the catalog of movies and TV series offered.

Netflix had already expected to retire the plan in January of this year. In a report to investors, after the company’s positive financial statement, the streaming giant highlighted that the basic plan with ads represents about 40% of the company’s subscriptions, which is why it decided to start terminating the basic plan without ads in North America.

Netflix no longer offers the ad-free Basic plan in Brazil. But, unlike in the US, Brazilian subscribers can still keep a monthly subscription to the model, which costs R$30.90 per month, at 720p resolution — the lowest of the models offered in the country.

Worldwide, Netflix has more than 260 million subscribers, including 46 million in Latin America and Mexico.

Focus on the plan with ads

Focusing on an ad-supported plan is new for Netflix.

Traditionally, the streaming giant has always boasted that it doesn’t offer subscriptions with ads. This position was publicly reinforced by the company’s founder and former CEO, Reed Hastings, who now serves as an advisor to the company.

Netflix’s mantra changed in 2022, when the company suffered a record quarterly decline in new subscribers, by 1.2 million, for a total gain of 8 million new subscribers for the year, the worst result since 2011. During this period, growth was affected above all by the post-pandemic scenario, which kept people away from their homes (where streaming was a natural option, in the absence of cinemas and other entertainment options); and by rising global interest rates, which are forcing loss-making tech companies to become more efficient and profitable.

Netflix made a series of adjustments in the following months. It fired hundreds of people around the world, created “extra points fees” (with an increase of R$12.90 for each user who does not live in the same household as the account holder) and began focusing on plans with ads, in contravention of the streaming giant’s “no ads” policy.

The move, which proved successful, inspired rival companies, similarly pressured by the search for profitability, to adopt similar measures. Amazon, Warner, and Disney are some of the companies that have come up with solutions for their own streaming services in the following months.