Netflix announced Thursday that it will begin phasing out its Basic plan, its cheapest ad-free plan, which costs $11.99 a month in the United States.
Previously, the company stopped accepting new subscribers to the basic plan, and instead pushed customers to the ad-supported Netflix plan, which costs $6.99 per month. However, existing users can keep the basic plan.
In January, the company announced it would drop its cheap, ad-free plan in Canada and the U.K. The company said Thursday that the next two countries would be the U.S. and France.
Prime users in the US who want to watch Netflix without ads will now have two options: the standard Netflix plan, which costs $15.49 per month, and the Premium plan, which costs $22.99 per month.
According to Netflix, its cheaper, ad-packed “Standard with Ads” plan saw a 34% increase in subscriptions in the second quarter of this year.
The company on Thursday announced a record 277.65 million subscribers to its streaming platform, far outpacing competitors like Disney+, Peacock and Max (owned by Warner Bros. Discovery, the parent company of CNN). In all, Netflix added 8.05 million new customers in the second quarter.
The surge in new Netflix subscribers is partly due to the company’s efforts to push users who share passwords to create their own accounts.
However, the short-term subscriber surge could soon fade. Netflix said Thursday it expects subscriber growth to slow in the third quarter.
Netflix shares were down about 2% in after-hours trading, but are up more than 35% in 2024.
The company recently revealed that it will stop sharing quarterly subscriber numbers starting in 2025 in favor of a new disclosure: time spent on the platform.
Over the past couple of months, Netflix has also delved into the world of live sports programming and experiences.
And with Netflix’s recent push into advertising, the company is starting to look more like the traditional media companies it aims to displace, says Tim Nollen, Netflix analyst at Macquarie.
“Whatever legacy streaming companies are in their prime, Netflix is in a new and potentially sustainable way in the long run,” he said.
The early stages of Netflix’s development
Netflix made its biggest sports announcement yet in May. The company reached a three-year deal to stream NFL games on Christmas Day. The deal kicks off this year with Netflix streaming two NFL games worldwide on the holiday. In 2025 and 2026, Netflix will stream at least one game during the holidays.
“Netflix is now interested in live sports,” Nolen said. “That means Netflix could be the only place you’ll be able to watch these two games on Christmas Day, which could obviously add more subscribers.”
Streaming NFL games has proven to be a successful strategy for growing subscribers: In January, NBCUniversal’s streaming service, Peacock, saw an increase of 2.8 million subscriptions in the three days before it exclusively aired an NFL playoff game.
According to the company, this was the “highest subscriber acquisition time ever measured” by Peacock.
Earlier this year, Netflix also announced another high-profile foray into sports programming: a 10-year deal to stream “WWE Raw,” worth more than $5 billion.
“We survive because our members love it. It drives a lot of engagement and it drives a lot of emotion, and those are two things that are very valuable,” Netflix co-CEO Ted Sarandos said on the company’s earnings call Thursday. “The good thing is that advertisers love it, too.”
But live sports aren’t the only way Netflix is trying to expand its reach. Last month, the company said it plans to open two community entertainment venues called Netflix Houses.
Each of these “experiential” complexes, located in former malls in Dallas’ Galleria and King of Prussia (near Philadelphia), will be more than 100,000 square feet and include themed events, gift shops and restaurants. Both are slated to open in 2025.
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