Netflix has removed its basic tier in the US and UK, after Canada, as the streaming giant is exploring ways to crack down on password sharing and boost revenue. The basic tier, which cost $9.99 per month, allowed users to watch Netflix on a single screen in standard definition. Also, the basic plan didn’t allow you to add members under its paid-sharing policy.
“In Q1, we lowered prices in a number of less penetrated markets, and in Q2, we phased out our Basic ads-free plan for new and rejoining members in Canada (existing members on the Basic ads-free plan are unaffected). We’re now doing the same in the US and the UK. We believe our entry prices in these countries – $6.99 in the US, £4.99 in the UK and $5.99 in Canada – provide great value to consumers given the breadth and quality of our catalog,” the company said while reporting its second quarter earnings.
The basic plan is now no longer available for the new members in these countries. However, those currently using the basic plan will remain on the plan until they change plan or cancel the account, confirms Netflix.
Paid sharing helps Netflix gain 6M new subscribers
The removal of the basic tier is a sign that Netflix is serious about cracking down on password sharing and may do the same in other markets including India soon. The company is also seeing some success with its ad-supported tier, which launched in late 2022. The second quarter’s earnings report of Netflix saw gain of 5.9 million new subscribers globally.
The report, by research firm Antenna, found that Netflix’s ad-supported tier and stricter password sharing policies have helped the company attract new subscribers. The report found that Netflix’s ad-supported tier attracted 17-20% of new signups for the March to June quarter. The report’s findings suggest that Netflix’s crackdown on password sharing is having a positive impact on the company’s business.
Account sharing update in India
Former Netflix CEO Reed Hastings last year said that password sharing is a big issue for the company, and that it is costing them billions of dollars in lost revenue. The company has now started sending out emails to subscribers who are sharing their password outside their household in India. The email underlines that Netflix account is meant to be used by one household.
“Starting today, we will be sending this email to members who are sharing Netflix outside their household in India. A Netflix account is for use by one household. Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices,” says Netflix.
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