Netflix retired the last cheap ad-free plan as its ad tier hit 40% of sign-ups
Basic, the $9.99 ad-free plan, was closed to new and switching subscribers in June 2023 and will be retired in Canada and the UK from April 2024.
What was changed
In its Q4 2023 results Netflix told investors it would 'retire' the Basic plan — the cheapest ad-free option, at $9.99 a month — in Canada and the UK starting in April 2024. New subscribers and existing members who wanted to switch had already been unable to choose it since June 2023, when the company first cut it off; existing Basic subscribers could keep paying as long as they didn't change accounts.
The alternative menu: a $5.99-a-month plan with advertisements, or ad-free plans starting at $16.49. Netflix said plans featuring ads already accounted for 40% of all sign-ups in markets where the ad tier was offered, and that it planned to improve ad targeting. The company would not confirm the exact date existing Basic customers would be cut off, referring questions to its quarterly investor letter, which said the action would start in the second quarter.
The context made the plan's demise look like mopping up rather than gambling. Q4 2023 brought 13.1 million new subscribers — Netflix's best growth since the start of the pandemic, beating estimates of 8.97 million — revenue up 12% year over year, and a stock rise analysts attributed to confidence that Netflix had won the streaming wars through its password-sharing crackdown and content slate. Competitor Amazon Prime Video was about to roll out mandatory advertisements, charging Canadian viewers an extra $2.99 a month to opt out.
Why it worked
Basic was the one plan that fed neither revenue engine: its members avoided both ads and premium prices.
Sequencing softened the shock — new and switching members lost Basic in June 2023, a year before existing members.
The password-sharing crackdown and the ad tier worked as one system, converting borrowed accounts and cheap legacy plans into paid ones.
What can be applied
When a legacy plan defends the old model, closing it is the real announcement: forcing the choice between ads and higher prices converted price sensitivity into revenue.
Aftermath
Netflix planned to spend as much as $17 billion on content in 2024 after the dual Hollywood strikes, and unveiled a more than $5 billion deal to bring WWE Raw exclusively to the service from January 2025. Industry watchers warned the days of low streaming bills were over as Disney+ and others pushed profitability too.