Pay more or watch ads: Netflix is killing its ad-free Basic plan in the US

To maximize its revenue and keep shareholders happy, Netflix has been devising innovative plans to make customers pay more. Instead of focusing on its content’s quality and developing useful features, the company has been busy exploring new ways to inconvenience its users. Following the password-sharing crackdown, Netflix is now discontinuing its cheapest ad-free plan in the US and France.

Netflix announced through its second quarter earnings report (via The Verge) that it will phase out its $11.99 Basic plan in the US and France. The change was first tested in the UK and Canada, pushing users to watch ads on a cheaper tier or pay more for the ad-free Standard and Premium plans.

While the Basic plan was first dropped in the US a year ago, those who already subscribed were allowed to retain the tier for as long as they continued to pay. With Netflix now completely killing this tier, existing subscribers must pick between the ad-supported $6.99 plan or the ad-free ones offered for $15.49 and $22.99. Alternatively, they can cancel their subscriptions and look into a better streaming service.

This change makes business sense, as over 45% of new subscribers reportedly opt for the ad-supported tier. Prompting users to pick between ads or pricier plans is a win-win strategy that could help Netflix boost its earnings in the coming months.

Beyond killing its cheapest ad-free plan, Netflix is also testing ads that appear on the pause screen. Additionally, the company will start measuring its growth by regional revenue rather than number of new subscribers.