Netflix axes basic plan as it adds 6 million subscribers

Netflix has officially axed its cheapest ad-free plan.

The long-offered basic plan, which let people stream movies and TV shows in HD on one device at a time, cost $9.99 per month. Netflix stopped offering it to new subscribers in Canada last month, and now is dropping it in the U.S. and U.K., too.

Now, with basic gone, the cheapest ad-free plan Netflix offers new subscribers is $15.49 per month. If you’re willing to put up with ads, you can drop that to $6.99 per month. (And if you want the fancy stuff, that’ll jump you to $19.99 a month.) Current subscribers who already have the basic plan can keep it for $9.99/month going forward, so long as they don’t change or cancel their plan.

Netflix announced the basic plan kill during its Q2 earnings call, with the reasoning that its “entry prices” for ad-supported plans “provide great value to consumers given the breadth and quality of our catalog,” per The Verge.

“We think the entry prices we have right now represent an amazing entertainment value and are attracting a healthy share of signups,” Netflix co-CEO Greg Peters

Netflix added nearly 6 million paying subscribers in Q2, bringing it to a total of 238 million. It attributed this growth to its unpopular anti-password-sharing measures–mostly the one where it’s making subscribers pay an additional $8/month to let other people use their account. (And that’s eight bucks a person, not eight bucks to unlock an unlimited sharing mechanism.)

Netflix said new signups prompted by paid sharing “are already exceeding cancellations.”

Spencer Neumann, Netflix’s CFO, said paid sharing is Netflix’s “primary revenue accelerator in the year.”

“Most of our revenue growth this year is from growth in volume from new paid memberships, and that’s largely driven by our paid sharing rollout,” he added.

The subscriber add is a significant change from this time last year; in Q2 2022, Netflix lost 970,000 subscribers.

For this quarter, it posted earnings of $8.19 billion–less than the projected $8.3 billion, but up from Q2 2022’s earnings of $7.97 billion.