Netflix to Cancel Its Cheapest Ad-Free Package

Netflix subscribers may soon face higher costs. The streaming giant announced its decision to discontinue its cheapest ad-free subscription plan, currently priced at $11.99 per month. Moving forward, users must choose between the ad-supported $6.99 per month plan or the $15.49 per month plan for the most affordable ad-free option. The $11.99/month plan is currently the only one that permits just one stream per household.

“Essentially, we’re providing [users] a better experience, two streams versus one. We’ve got higher definition. We got downloads. And, of course, all at a lower price, $6.99 in the United States. We think that represents a tremendous entertainment value. And it includes ads,” explained Netflix co-CEO Greg Peters. “For members who don’t want that ads experience, they, of course, can choose our ads-free standard or premium plans as well.”

This represents the second major change in the past year that might not sit well with Netflix subscribers. Earlier, Netflix officials praised the service’s efforts to crack down on password sharing.

“We believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” a letter sent to shareholders this week stated. “Features like Transfer Profile and Extra Member were much requested, and many millions of our members are now taking advantage of them.”

Netflix continued, “At this stage, paid sharing is our normal course of business — creating a much bigger base from which we can grow and enabling us to more effectively penetrate the near term addressable market of ~500M connected TV households (excluding China and Russia), which should increase over time as broadband penetration rises.”