Netflix is ​​ditching the cheapest ad-free subscription in the US and UK, but why? – /Movie

So why would Netflix remove this option for potential subscribers? It all has to do with how much money they can make per subscriber. For years, the company resisted implementing an ad-supported plan, as people generally loved not having to deal with commercials after years of doing so on cable. But when subscriber growth leveled off, Netflix decided to give it a go. It was a huge success, as the ad level accounted for more than 7.6 million signups last quarter.

Netflix has been close to leveling off in terms of subscriber growth and the level of ads pretty much accounts for whatever growth they’re seeing right now. The other thing to consider is that the Basic plan probably represented much less actual revenue per subscriber, which is very important. The advertising plan generates advertising money on top of the subscription fee, while the standard plan is directly more expensive. It’s not that hard to understand why Netflix is ​​removing the Basic plan now, as the company is clearly trying to maximize profit.

We’ll likely hear more about this move soon when Netflix reports its second-quarter earnings later today. Stay tuned.

Leave a Comment