Sponsored By

Netflix to get rid of ‘basic plan’ despite record earnings

US SVoD giant Netflix continues to go from strength to strength but is still getting rid of its cheapest ad-free price tier.

Scott Bicheno

January 24, 2024

2 Min Read

Netflix reported record revenues and subscriber numbers in Q4 23. “Our healthy top line growth reflects the benefits of paid sharing, our recent price changes and the strength of our underlying business driven by a strong slate,” it said in the accompanying letter to shareholders. “Revenue was $0.1B (2%) above our October forecast due to favorable F/X movement and stronger than anticipated membership growth. Paid net additions totaled 13.1M in Q4’23 vs. 7.7M in Q4’22 — our largest Q4 ever.”

“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 ads plan now accounts for 40% of all Netflix sign-ups in our ads markets and 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.”

Netflix_q4_23.jpg

So now, in the UK, you can have ad-supported membership for £5 per month, standard without ads for £11, and premium (which gives you more members and supported concurrent devices) for £18. Those (including your correspondent) who are already on the £8 basic ad-free tier can stick with it (for the time being) but it’s now closed to new subscribers as detailed above.

This move is consistent with a broader trend towards the introduction of ads to paid-for subscription video on demand services. The time-honoured dealer technique of offering a product at low prices, only to yank up the cost once they’re hooked, was always inevitable in the SVoD space. There is a presumed maximum household budget for such services and, with competition so fierce, ads would appear to be the easiest way to grow revenues, especially if everyone else is doing it too.

View post on Twitter

View post on Twitter

About the Author(s)

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

Get the latest news straight to your inbox.
Register for the Telecoms.com newsletter here.

You May Also Like