Netflix is marshalling resources around its ad-supported Standard plan, pulling the plug on ad-free Basic in an effort to drive more eyeballs to the service’s sponsored tier. The $9.99 per month Basic plan is no longer available “for new or rejoining members” in the U.S. and UK and was dropped in Canada last month. Existing Basic subs can continue the plan until they decide to change tiers or cancel. Standard with Ads has since its November launch accrued more than 5 million subs, according to Netflix, which says 25 percent of new sign-ups have chosen that package.

“Our starting prices of $6.99 in the U.S. and £4.99 in the U.K. [for Standard with Ads] are lower than the competition and provide great value to consumers given the breadth and quality of our catalog,” a Netflix spokesperson told Variety.

“With the Basic tier off the table for new subscribers, those who wish to watch Netflix without adverts will now have to pay at least £10.99/month ($15.49 in the U.S.),” writes Cord Busters.

Netflix shuffled its pricing deck on the eve of Q2 earnings, released after the bell on Wednesday. The company had some good news, announcing nearly 6 million new paid subscribers from April through June in the wake of its crackdown on password sharing, bringing its global total to 238 million.

But that wasn’t enough to buoy its stock. Shares slid 9 percent on news it missed revenue projections. “Quarterly revenue climbed 2.7 percent from a year earlier to $8.2 billion, shy of analyst forecasts of $8.3 billion,” according to Reuters, which says the company’s guidance pegs Q3 at a rosy $8.5 billion, while “Wall Street had been forecasting $8.7 billion.”

Netflix’s subscriber growth is playing out against a backdrop of strikes by both the Writers Guild of America and the Screen Actors Guild and American Federation of Television and Radio Artists (SAG-AFTRA), resulting in the streamer’s balance sheet stuffed with cash not being spent on new productions, according to analysis by podcast “The Town.”

It has apparently stockpiled enough content to keep viewers hooked. Netflix said, “‘the vast majority of TV shows and movies’ are available on ad-supported plans — about 95 percent of Netflix’s total catalog on average globally as of Q1 — but that ‘a small number are not due to licensing restrictions,’” according to Variety.

In addition to the U.S., UK and Canada, Netflix currently offers ad-supported plans in Australia, Brazil, France, Germany, Italy, Japan, Korea, Mexico and Spain.

Related:
Netflix Password-Sharing Crackdown Delivers Jolt of New Subscriber Growth, The Wall Street Journal, 7/19/23
Netflix Subscriber Growth Skyrockets Amid Strike, Password Sharing Crackdown, The Hill, 7/19/23
The 5 Biggest Takeaways from Netflix’s Blockbuster Earnings Report, CNN, 7/20/23