Netflix announced on Thursday that it will start phasing out its Basic plan, its cheapest advertising-free plan, which costs $11.99 per month in the United States.
The company had previously stopped accepting new sign-ups for the Basic plan, instead pushing customers to Netflix’s ad-supported plan, which costs $6.99 per month. However, the company allowed existing users to maintain their basic plan.
In January, the company said it would retire its cheapest ad-free tier in Canada and the UK. On Thursday, the company said the US and France are next.
Basic users in the US who want an ad-free viewing experience on Netflix will now have two choices: Netflix’s Standard plan, which costs $15.49 per month, and its Premium plan, which costs $22.99 per month.
The company said its cheapest, ad-supported tier, its “Standard with ads” plan, saw a 34% jump in sign-ups in the second quarter of this year.
It reported a record-high 277.65 million subscribers on its streaming platform on Thursday, far outpacing streaming competitors like Disney+, Peacock, and Max (which is owned by Warner Bros. Discovery, CNN’s parent company). Overall, the company added 8.05 million new subscribers in its second quarter.
The company’s efforts to encourage users who share passwords to create their own accounts have contributed to its surge in new subscribers.
However, the short-term subscriber jolt from the password-sharing crackdown could soon fade. On Thursday, Netflix said it expects the pace of its subscriber additions to slow in the third quarter.
The streaming media company’s stock fell nearly 2% in after-hours trading, but it has climbed more than 35% in 2024.
The company recently disclosed that it would stop sharing its quarterly subscriber numbers beginning in 2025 in favour of a new disclosure: time spent on the platform.
In the past two months, the company has also ventured further into the world of live sports programming and experiences.
And with the streaming media platform’s recent advance into advertising, it is starting to look closer to the traditional media companies it seeks to disrupt, said Tim Nollen, a Netflix analyst at Macquarie.
“Whatever the old broadcasters were in their best of times, the streaming media platform is becoming that in a new and probably longer-term, sustainable way,” he said.
