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Ad-Free or Budget-Friendlyæ Netflix Forces Subscribers to Choose
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Netflix is making significant changes to its subscription plans. Starting July 13, the company will discontinue its $11.99 ad-free plan, leaving customers with two main options: a $6.99 plan that includes advertisements or a pricier ad-free tier.

This shift is currently affecting users in the UK and Canada, with plans to expand to other countries in the second quarter of the year. Despite these changes and increasing subscription costs, Netflix's user base grew by 16% in the first quarter of 2024, reaching 269.6 million subscribers.

The new structure forces customers to choose between a budget-friendly option with ads or pay substantially more for an ad-free experience. The available plans will include the $6.99 ad-supported tier, a $15.49 ad-free plan, and a $22.99 ad-free 4K option.

Some users have reported being unable to continue watching content on their current ad-free plan without selecting a new subscription option. This move has sparked criticism from some customers who feel Netflix is neglecting middle-class viewers, creating a divide between "poverty-class ad-supported" viewers and "wealthy-class" subscribers.

Netflix had previously announced its intention to guide customers towards either more expensive or ad-supported plans during its Q4 earnings call. The company views this as an opportunity to increase revenue and profits in the medium to long term, while also improving targeting and measurement capabilities for advertisers.

While some speculate that Netflix is raising prices to fund ongoing projects like live programming and on-platform gaming, not all subscribers will necessarily use these additional services.

Despite concerns about rising costs leading to some cancellations, Netflix's financial performance remains strong. In the first quarter of 2024, the company reported a net income of approximately $2.33 billion.

Here are some of Netflix's major competitors and their pricing structures (as of July 2024):

Amazon Prime Video:
This isn't a standalone service, but rather a perk that comes with an Amazon Prime membership. Prime membership costs $14.99 per month or $139 annually. In addition to Prime Video, you'll get benefits like free shipping, fast grocery delivery, and more

Hulu offers both on-demand streaming and a Live TV option. Their on-demand service starts at $8 per month with ads, or $14.99 per month ad-free. They also have a bundled option with Hulu + Live TV, which starts at $69.99 per month with ads and includes access to content from Hulu, Disney+, and ESPN+

Disney+ offers a large library of Disney, Pixar, Marvel, Star Wars, and National Geographic content. Their price is $7.99 per month

HBO Max:
HBO Max offers a mix of HBO originals, movies, and TV shows. Their subscription costs $14.99 per month

Apple TV+:
Apple TV+ focuses on Apple's original content. It costs $6.99 per month

Posted on: Jul 2 2024

Sectors: Information Technology

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