Netflixis continuing to change its business plan and model. The streamer is pushing for value-conscious customers to support the streaming service’s new ad-based platform.
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Now, asNetflix’s paid-sharing programis predicted to become a success in the streaming giant’s Q2 earnings, Netflix is pursuing to increase its revenue by eliminating its cheapest streaming plans without ads in the United States and the United Kingdom,Varietyreports. The Basic Plan, which allowed a single stream for $9.99/month in the U.S. and £6.99/month in the U.K. without ads, is no longer available for new or rejoining users. However, existing members can remain on this subscription until they change their plans or cancel their accounts.
This new update is Netflix’s latest push to entice users to opt for their Standard With Ads plan, which has starting prices of $6.99/month in the U.S. and £4.99/month in the U.K. This option is “lower than the competition and provide[s] great value to consumers given the breadth and quality of our catalog,” a Netflix spokesperson told Variety. The Standard With Ads plan, which averages around four minutes of unskippable advertising time per hour, allows up to two devices simultaneously. However, it does not provide offline streaming or the option to add an extra screen to the account.
According to Netflix, the company’s new business model is a success. During the Q1 earnings reporting,Netflix announced that the ad-supported planwas already producing higher revenues than the previous Standard plan. With the ad-supported subscription, Netflix is generating at least $8.50/month in revenue per user on the Standard With Ad plan alone.
Though existing users will still be able to remain on The Basic Plan, with no ads, the company assures that “the vast majority of TV shows and movies” are available on ad-supported plans, with a small number beingrestricted due to Netflix licensing issues.Netflix’s ad-supported plans are becoming more common internationally, already U.S., U.K., Italy, Japan, Mexico, and more.
