In a surprising move, Netflix announced that Canadian users will no longer have access to the cheapest streaming subscription tier that doesn't include ads. The $9.99 Basic option, which allowed users to enjoy their favorite shows without interruptions, has been discontinued. Canadians looking to get Netflix or switch plans will now have to choose between accepting ads into their streaming sessions or upgrading to a higher-priced plan for an additional $6.50 per month.
Reports from local sources in Canada, such as The Winnipeg Free Press, have confirmed this change, which was quietly implemented by the streaming service sometime this month. So far, the removal of the Basic tier only affects Canadian Netflix users. Existing Basic subscribers can continue using the service for now, but if they decide to pause their accounts until the next season of Stranger Things releases, they won't be able to return to the same pricing model.
This sudden modification to Netflix's long-established pricing structure represents a significant shift for the company. Netflix had always avoided incorporating ads into its streaming service. With the removal of the Basic tier, users who were accustomed to paying $9.99 CAD per month are now faced with the choice of downgrading to the $5.99 CAD ad-supported tier or upgrading to the $16.49 CAD Standard plan. The latter offers simultaneous streaming on two devices and some video quality upgrades. However, it's worth noting that Canada was among the first markets to experience password-sharing restrictions as well.
Last year, Netflix introduced the "With Ads" tier as a strategy to increase revenue and regain support from stockholders after a financially challenging early 2022. Initially, the ad-supported tier wasn't widely popular, but it gained some traction in early 2023, as indicated by Netflix's internal data.
The streaming giant had already begun cracking down on password-sharing in test markets in Central and South America before expanding the efforts to countries like Canada, New Zealand, Portugal, and Spain. Although the company intends to extend these measures to U.S. users who share their passwords, it hasn't provided a specific timeline for implementation. Netflix has not disclosed any plans regarding the possibility of similar changes for other markets in the future.
According to The Hollywood Reporter, during its 2023 Upfront presentation, Netflix revealed that the ad-supported option had attracted nearly 5 million global monthly active users. Co-CEO Greg Peters also mentioned that one-quarter of new signups worldwide choose the ad-based tier.
These numbers align with external analysis, which indicates a growing preference for ad-based subscription tiers across multiple streaming networks. Data analytics firm Antenna's report shows that, since the introduction of the With Ads tier, Netflix has seen more new signups from ad-based subscribers than non-ad subscribers. It appears that Netflix aims to increase ad viewership numbers while simultaneously pushing users toward non-shareable plans, thereby maximizing their revenue streams.
In conclusion, Netflix's decision to remove the Basic subscription tier without ads in Canada has stirred controversy among Canadian users. As the streaming landscape continues to evolve, the introduction of ad-supported options and stricter measures against password sharing indicates Netflix's commitment to exploring new strategies to increase revenue and adapt to changing viewer preferences. Only time will tell if these changes will extend to other markets and how subscribers will respond to these adjustments in the long run.
