Netflix Just Killed Off Its Cheapest Ad-Free Plan — What It Means for You

Two people ride bikes in front of a TV that has Netflix on.
Getty Images and Tina Russell/The Penny Hoarder

In yet another shake-up of its pricing model, Netflix has killed off its cheapest streaming plan that doesn’t have ads.

That leaves new and rejoining Netflix members with two options — either put up with advertisements or pay more money each month for an ad-free viewing experience.

Netflix’s Basic plan, which costs $9.99 per month, is no longer available “for new or rejoining members” in the U.S. and U.K., according to Netflix. The company recently dropped this plan in Canada, too.

If you’re already on the Basic plan, however, don’t worry. You can “remain on this plan until you change plans or cancel your account,” the streaming giant said.

This is all part of Netflix’s strategy to lure more budget-minded subscribers onto its advertising-supported plan.

Netflix Had Offered 4 Plans

Let’s say you want to sign up for Netflix and start watching “The Witcher” or “Stranger Things” or “Bridgerton” or “Is It Cake?” Not to mention your choice of thousands of movies.

Up until just recently, Netflix offered you four choices:

  • Standard With Ads – 1080p HD, two devices
  • Basic – 720p HD, one device
  • Standard – 1080p HD, two devices
  • Premium – 4K HD, six devices

The Standard With Ads plan costs $6.99 per month. The Basic plan, which is being phased out, costs $9.99 per month.

The Standard plan costs $15.49 per month, and the Premium plan costs $19.99 per month.

So now if you join (or rejoin) Netflix, you can either pay seven bucks a month and sit through advertisements, or you can pay more than twice that to skip the ads.

End of Basic Plan Follows Password Crackdown

Netflix’s latest move comes just two months after it announced it would begin charging subscribers $7.99 a month for sharing their password with someone outside their household.

Netflix had previously turned a blind eye to password sharing but later said it’s been losing too much money to the practice.

Getting booted off your buddy’s Netflix account? You don’t have to leave your watchlist and watch history behind. Here’s how to transfer your Netflix profile.

They Want You to Watch the Ads

In dumping its cheapest ad-free plan, Netflix is trying to lure budget-minded subscribers to its plan that has advertising, industry observers say.

Netflix launched the subscription tier with advertising in November. It was originally called “Basic With Ads” and provided viewers with only 720p HD video, which isn’t even full HD. It also restricted viewing to one device.

However, in April the streaming giant upgraded its advertising subscription plan to “Standard With Ads,” providing viewers with 1080p Full-HD video on up to two devices at a time. It kept the same price, though, making the ad-supported plan more attractive.

(Most TVs today have a resolution of 1080p Full-HD or 4K Ultra HD, so 720p HD is outdated by current standards.)

The ad-supported Netflix plan places advertisements before and during movies and TV shows, with each ad lasting up to 30 seconds. Netflix says subscribers are subjected to four minutes of ads per hour, which is less than traditional cable TV.

Netflix’s ad-supported plan has proved to be somewhat popular. Publications that cover the entertainment industry, like Variety magazine, noted that in May, Netflix reported that 5 million members had signed up for the ad-supported plan, with 25% of new subscribers choosing that option.

So now the choices for new and returning subscribers are:

  • Put up with ads on Netflix for $7 a month, or;
  • Watch Netflix without ads for either $15.50 or $20 a month, depending on what quality of picture you want and how many devices you want to use.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.