As if Netflix hadn't already become expensive enough, it has been revealed that it will "discontinue" its ad-free basic tier. In effect, this will raise the cost of watching Netflix content without commercials, which is a bit odd considering that Netflix has long opposed advertising on its platform.

Netflix confirmed this change to its shareholders and board during its latest earnings call. Basically, Netflix is taking the next step of discontinuing its Basic ad-free plan in countries where ad-supported Netflix is available. This began last year when Netflix stopped enrolling new and returning subscribers to the plan in the US, UK, and Canada.

Netflix has stated that it is considering "discontinuing" the ad-free Basic plan, beginning in the UK and Canada in Q2 2024. This will probably happen in the U.S. eventually, but it is unclear when.

Netflix also confirmed that those still on the $11.99 Basic subscription plan will have to switch to another Netflix tier. The ad-free options are the $15.49 standard tier or the $22.99 premium tier, both of which are essentially separate price increases. The ad-supported standard tier is $6.99, but it is clear that ads will be displayed while streaming.

Netflix quickly clarified that the standard tier, whether you choose the ad-supported or ad-free option, will have benefits that basic subscribers do not. With full HD resolution and the option to watch two streams simultaneously, is this worth the additional $2.50 per month?

Maybe, if you made that choice independently, not because Netflix gives you no choice; I have no idea how many people are still subscribed to Netflix Basic, but I have no idea how many of them will pay more or commercial I can't imagine that any of them would be excited about having to choose between paying more or watching commercials.

My guess is that Netflix is hoping that these subscribers will fall into the ad-supported tier. However, given that ad-supported Netflix is already $5 cheaper than the basic tier and the video quality is better, those who are happy with the ads would have switched or intended to switch anyway.

Still, it is interesting to see how Netflix's view of advertising has changed over the past few years. In particular, Netflix co-founder and former CEO Reed Hastings claimed that he was not interested in the advertising business as of 2020.

Increased competition (and new leadership) will probably make companies do so. Especially when they realized how valuable ad-viewing customers actually were: according to Netflix's Q1 2023 earnings call, they were worth more economically than subscribers to ad-free standard plans.

It will be interesting to see how this plays out and how long it will be before Basic is discontinued in the US.

This post has been updated with official details from Netflix.