July 3, 2024, 2:17 pm | Read time: 6 minutes
After introducing a fee for account sharing, Netflix has implemented another price increase in many countries, which reached Germany in May. All packages, except for the ad-supported subscription, are becoming more expensive. Additionally, Netflix is now canceling the basic subscription for existing customers.
Netflix wants a subscription to be used only by members of a household. For this reason, customers have had to register their devices for some time now; otherwise, they lose access to the streaming service. Due to this adjustment, many customers worldwide have decided either to pay the account-sharing fee, which allows access for another user outside the household, or to switch to their own subscription, such as the basic plan. The latter is especially suitable for those who use Netflix alone, as it is the cheapest option without ads. However, since October 2023, new customers in Germany can no longer subscribe to the basic plan. Existing customers now also have to adapt.
Overview
Netflix Cancels Basic Plan for Existing Customers
As early as the end of June 2023, Netflix removed the basic plan from the booking page for new customers in Canada, with other countries following a few months later. According to the news portal CTNews, a company spokesperson said at the time that the plan would also be discontinued for existing users “in the near future.” That time has now come.
In some countries, Netflix has now canceled the basic plan for customers. Reports of this have come from Canada and the United Kingdom, for example. The provider had already announced this step beforehand. In the U.S., Netflix informed some customers with an existing basic plan as early as May that they would only be able to use their subscription for a short time. If they did not choose another package, they would lose access to Netflix starting July 1, according to the notification.
However, July 1 does not seem to be set in stone as the final date for the discontinuation of the basic plan. Recent posts on Reddit mention cases where users can still access their accounts until mid-July. After that, they must choose another Netflix subscription. The switch, however, comes with higher costs if users still want to avoid ads.
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Only Alternative: Ads or More Expensive Subscription
The move to completely remove the basic plan from the portfolio is likely a significant blow for many subscribers. Since account sharing is no longer allowed, many customers see the basic plan as a solution. It is, after all, specifically intended for use by one person. So why is Netflix cutting it?
When asked, Netflix explained that they want to simplify pricing due to the increased options in the entertainment sector. Therefore, Netflix updated its rates on October 23, 2023, and since then, new customers can only choose between the standard plan with ads and the ad-free standard and premium plans. After the price increase, which has been in effect in Germany since the end of May, the ad-supported subscription still costs 4.99 euros per month. However, all other options have become more expensive.
Even subscribers with an existing basic plan have to pay more for the few weeks until it expires. The price increased from the former 7.99 euros to 9.99 euros at the end of May. The standard plan now costs 13.99 euros per month instead of 12.99 euros. The premium option is even 19.99 euros instead of 17.99 euros monthly.
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No Official Reason for Changes
Netflix does not provide a real explanation for why it is discontinuing the basic plan. However, a reason for the decision is likely simply money. Netflix hopes to significantly increase its revenue in the long term by eliminating the basic plan. They aim to achieve this through a switch to the more expensive standard plan or by increasing demand for the ad-supported plan as the only remaining option under 10 euros.
In the ad-supported plan, the streaming provider inserts four to five minutes of ads per hour—both as pre-roll and mid-roll. This means users see commercials both before a video starts and in the middle of streaming. Advertising is a lucrative business for many providers, as it is well-paid. Through various advertising deals, they can significantly increase their revenue. And Netflix desperately needs this, as the provider has been in the red for years and continues to incur debt by purchasing expensive licenses and producing its own content.
Are Users Canceling Their Subscription Now? The TECHBOOK Survey Says
Initial reports about the discontinuation of the basic plan emerged in June 2023. Even then, we conducted a TECHBOOK survey to determine how users would react if the affordable ad-free plan disappeared from the offering. A total of 35,260 readers voted (as of May 2, 2024)—with a clear result. A full 28,112 of them—about 80 percent of participants—said they would completely cancel their Netflix subscription. Only 2,908 readers indicated they would switch to the standard plan. Even less interest was shown in the ad-supported plan, with just 2,309 readers opting for it. The account-sharing fee, and thus sharing the standard or premium account, is seen as an alternative by 1,931 users.
Frustration over the decision is also spreading in various forums. On Reddit, one user writes: “Remember when Netflix was cool? Remember when it actually had good movies and series, was affordable, and offered great service?” Another person writes that they are now saying goodbye to Netflix after 20 years: “I’ve had Netflix for 20 years with this plan. I’m going to let it run out and then goodbye. Don’t expect people to pay more for the trash shows and movies. Tell us again why we should pay more: because ‘The Witcher’ is the new ‘Game of Thrones’?”