BNR – Netflix has got rid of the basic plan in the United States and the United Kingdom to attract customers to the advertisement plan. In the basic plan, customers were able to see TV series and films with no advertisements.
The streaming service stated on its website that it will not offer the ten-dollar plan anymore for new or re-joining subscribers. Subscribers who already use the plan may still use it until they transfer to another plan or delete their accounts.
Introduction of Advertisement Plan
Netflix had introduced the seven-dollar plan with advertisements in November 2022.
The new plan is available in 12 countries, including the United States, as a substitute for the old no-advertisement tiers. The company established the ad plan to bring in more subscribers and increase its profit margin, considering the high competition in the market.
Furthermore, Netflix had clenched on subscribers who share their accounts’ passcodes in May. The company obliged users who benefit from one account outside of the same household to pay an extra cost. The move forced thousands of users to register for the cheaper basic plan.
Impact on Subscribers and Profit Margins
Some experts from Macquarie projected that the most significant component of the company’s clampdown on sharing accounts will be driving more subscribers to the new $7 advertisement plan. They also stated that the move will gain Netflix higher profits from commercials and ads.
Netflix stated in May that the new ad plan had received about five million active subscribers in one month. The company’s announcement reveals its intention to draw advertisers by explaining the huge user base in the new plan.
The renowned streaming service will soon announce its outcomes for the last three months. In the meantime, investors and advertisers will weigh the hazards resulting from the Hollywood strike.