Netflix to phase out its cheapest ad-free plan

The streaming giant said it will "retire" its $11.99 per month ad-free plan in order to drive more customers to its cheapest ad-supported plan.

If you're a Netflix user who enjoys watching shows or movies without advertisements popping up every few minutes, you'll soon have to either pay more or find another streaming service.

Netflix announced Wednesday in an earnings report that it is planning to "retire" its basic ad-free subscription plan that costs $11.99 per month in order to drive more customers to its ad-supported plan. The company said changes will begin with Canada and the United Kingdom in the second quarter of this year before "taking it from there."

Netflix has already done away with its basic ad-free plan for new or returning subscribers, but the change means current basic plan members who still prefer an ad-free viewing experience will now have to subscribe to the $15.49 per month option or upgrade to the premium plan for $22.99 per month. Otherwise, users can still choose the ad-supported option at $6.99 per month.

"Scaling our ads business represents an opportunity to tap into significant new revenue and profit pools over the medium to longer term," the company said in a letter to shareholders. "In Q4'23, like the quarter before, our ads membership increased by nearly 70% quarter over quarter, supported by improvements in our offering (e.g., downloads) and the phasing out of our Basic plan for new and rejoining members in our ads markets." 

Netflix also announced it added 13.1 million net subscribers in the final quarter of 2023, with 40% of new subscribers signing up for the cheaper ad-supported plan. That brings the estimated subscriber total to around 250 million households that pay for Netflix in some capacity each month across the globe.