Netflix has removed its $9.99 “Basic” subscription option for U.S. and Canadian customers.
Key Details
- New Netflix subscribers will no longer be allowed to choose the basic subscription but must instead choose an option with ads or that costs more.
- The new monthly subscription tiers include Standard with ads ($6.99), Standard ($15.49), and Premium ($19.99).
- The change will not affect current Basic subscribers, who will be allowed to keep or change their plans as they choose for the moment.
- Netflix removed Canadian Basic options late last month, only adjusting the American subscription option this week, The Hollywood Report notes.
- The company is scheduled to host its second-quarter earnings call on Wednesday afternoon.
Why It’s Important
As we previously reported, the streaming wars have proven to be a highly costly and unprofitable endeavor, with all major streaming services reporting severe double-digit losses in 2022 and many planning to be sold-off, downsized, price-hiked, or consolidated this year. Streaming services are in the red, and investors are losing patience with them.
Netflix, in particular, has made major changes to its service offering in the past eight months to increase profitability. Despite hosting a base of at least 232.5 million subscribers, the service has repeatedly cracked down on customers in the past year. The company has cracked down on password sharing and implemented advertising tiers to sell ad space. Former CEO Reed Hastings defended the changes in December, noting that he had changed his mind on the issue of selling ads on Netflix after vehemently opposing the idea.
Other streaming services have seen similarly notable changes. Disney+ has removed millions of dollars worth of expensive original content from its service as a tax write-off and is planning to consolidate its service with Hulu later this year. HBO Max and Discovery+ were formally merged into a single MAX app in April.
Notable Quote
“In Canada, which we believe is a reliable predictor for the U.S., our paid membership base is now larger than prior to the launch of paid sharing, and revenue growth has accelerated and is now growing faster than in the U.S.,” Netflix recently told investors.
