The no-advertising, lowest-cost plan from streaming giant Netflix is set to be discontinued, the media has reported. Netflix's "Basic" plan with no ads will be discounted in the UK and Canada. While announcing its fourth quarterly (Q4) results, Netflix highlighted that its ad-supported plan, saying that it accounted for 40 per cent of sign-ups in markets where it has been launched. The subscriber count for ad-supported tiers saw a remarkable 70 per cent quarterly growth, and even as specific figures weren't disclosed, Netflix mentioned surpassing 23 million monthly active unique users on ad tiers.
The company aims to attract additional customers to the ad-supported plan by phasing out the no-ads Basic plan in select countries where the ad tier is available, according to a report in Variety. Starting in the second quarter (Q2) of 2024, this change will start in Canada and the UK, with further decisions to be made based on performance, as outlined in Netflix's Q4 shareholder letter.
It is pertinent to note that, in a triumphant conclusion to 2023, Netflix reported a third consecutive quarter of robust subscriber growth, marking a noteworthy rebound for the company. The streaming service navigated challenges, including a crackdown on unauthorised access and a series of price hikes throughout the year. Netflix's Q4 results, unveiled on Tuesday, underscored the company's ability to attract new subscribers despite the elevated cost of its content.
With a substantial increase in subscribers, Netflix concluded 2023 with over 260 million global subscribers, showcasing an annual growth of nearly 30 million. This robust performance marked a significant turnaround from the lacklustre 2022, during which the company added only 8.9 million subscribers, raising concerns about its competitive edge.
Despite missing earnings per share targets, Netflix's revenue exceeded analysts' forecasts, reinforcing its position as a Wall Street favourite. The company's stock price surged by 65 per cent in 2023, outperforming other media giants like Walt Disney Co. and Warner Bros. Discovery, which faced challenges in monetising their video-streaming services.
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As the streaming landscape evolves, Netflix remains confident in its ability to convert password-sharing users into paying subscribers. The company's crackdown on unauthorised access is expected to contribute to sustained growth in the coming years. Analysts also anticipate an expanded focus on the video game segment, initiated by Netflix in 2021, as subscriber engagement in gaming on the platform continues to rise.