Against the backdrop of the writers and actors strikes, I wonder how long it will take before the different streaming services run out of new content. Not that it matters much to me personally, since my TV viewing habits form an inverse graph with the escalating output of new series. The more stuff that gets released, the fewer things I watch with each passing year. Part of it is sheer choice paralysis. But Netflix has in part reinforced my commitment-phobia by ruthlessly cancelling so many shows after one or two seasons. Rather than adapting to a “limited series” model that’s a little more common in the UK, where many shows last one season but have a satisfying story ending, Netflix lets their shows end on cliffhangers most of the time. So why would I invest in something new when it’s not likely the story will have a good resolution? But despite industry-wide disruptions from the strikes and general streaming fatigue, Netflix is pretty confident it can get people to sign up or renew their subscriptions. So confident, in fact, that they are eliminating their cheapest ad-free plan, which was $9.99 a month. That means new subscribers have to choose between the $15.49/month Standard plan, or get a worse experience with the ad-supported plan.

Netflix is no longer offering its cheapest streaming plan without ads in the U.S. and the U.K., with the company aiming to push value-conscious consumers to sign up for its advertising-supported package.

The Basic plan, which provided a single stream for $9.99/month in the U.S. and £6.99/month in the U.K., is no longer available “for new or rejoining members” in the respective countries. According to Netflix, existing Basic members can “remain on this plan until you change plans or cancel your account.”

The elimination of Netflix’s Basic plan is designed to boost customers on the ad-supported Standard With Ads, which the company first launched last November. In May, Netflix said it had signed up more than 5 million members for its ad-supported plans, with 25% of new subs taking the package.

“Our starting prices of $6.99 in the U.S. and £4.99 in the U.K. [for Standard With Ads] are lower than the competition and provide great value to consumers given the breadth and quality of our catalog,” a Netflix spokesperson tells Variety.

The company dropped the Basic plan in Canada last month. The move to end the Basic plan in the U.S. and U.K. comes as Netflix is set to report Q2 2023 earnings Wednesday after the market closes. Analysts expect Netflix to report a sizable lift from its new paid-sharing program, the company’s attempt to monetize illicit password sharing that launched widely during Q2 in the U.S. and several other countries.

In reporting Q1 2023 earnings, Netflix said that in the U.S., the ad-supported plan already was producing higher overall average revenue per customer (aka ARPU) than the $15.49/month Standard plan. That implies the company was generating at least $8.50/month in ad revenue per subscriber on the Standard With Ads plan.

Netflix’s Standard With Ads provides viewing on up to two devices simultaneously (as with the no-ads Standard plan) but does not provide offline viewing or the option to add an extra member. The plan serves an average of 4 minutes of unskippable ads per hour.

[From Variety]

I think I have the standard plan but I question its value on a weekly basis. Anyway, I think this represents something of a sea change for the streaming model. By essentially forcing their most price-sensitive consumers into watching ads, Netflix is implicitly admitting that their original business model has failed. They already started cracking down on password sharing which was not great for public perception of the brand. I think they will start funneling more and more people at higher price points into watching ads somehow. Maybe the ‘standard’ plan which is the next step up will start having 2 minutes of unskippable ads each hour, instead of the basic plan’s 4. Maybe they’ll explore the a-la-cart nonsense of Amazon Prime. I don’t know what the point is to subscribing to the damn thing if you have to purchase most movies and TV shows separately anyway. I put up with it only because Amazon has a decent variety of older movies and Netflix has systematically removed anything filmed before, like, 1985. But I really think the days of ad-free, all-you-can-watch TV shows and movies–that Netflix pioneered–are going to be over soon. And in the end I’m not so sure it’s a bad thing, when the streaming business model has made working conditions so bad for so many people.

photos from Netflix’s LA headquarters and top shows including Lincoln Lawyer, Quarterback and The Out-Laws courtesy of Netflix