Join the experts at Mediaweek, October 29-30 in New York City. Stay ahead of the shifts impacting the media landscape and gain fresh strategies to drive platform growth. Save 20% on passes.
When Netflix debuted its ad-supported tier in 2022, users were not automatically enrolled in the plan. Now, around two years later, the streamer is making some changes.
In July, Netflix announced it was eliminating its cheapest ad-free tier, the Basic plan, in the United States and France—and some Netflix subscribers shared on Reddit and X (formerly Twitter) that they are now receiving emails about being automatically enrolled into an ad-supported plan.
“Your Basic plan is being discontinued, and your new $6.99 Standard with ads plan automatically begins on your next billing date,” a customer email from Netflix on Aug. 5, 2024, obtained by ADWEEK, reads.
Though users can upgrade to an ad-free plan on their own for additional costs, they will be automatically subscribed to the $6.99 Standard with ads plan if they take no action, depending on when their billing cycle takes place. The Standard reported in May that Netflix was making similar moves in automatically enrolling Brits who formerly subscribed to the Basic plan to ad tiers.
The email also included a bulleted list of what users can expect from the ad-supported plan, including a lower price, better video quality, the opportunity to watch and download videos on two household devices at the same time, and a few short ads that promise to “not interrupt you during a scene,” as well as no ads on Kids profiles.
According to a Netflix representative, automatically enrolling users in the ads plan isn’t a change in strategy, but rather a move to put customers in its lower-priced plan following the Basic plan being discontinued.
Experts noted that Netflix moving its users to its ad tier could prove fruitful quickly.
“For advertising to become a driver of revenue growth for the company, Netflix must demonstrate a fertile addressable audience to lure big brand ad dollars,” Mike Proulx, vice president and research director at Forrester, told ADWEEK. “Netflix shuttering its Basic plan and, effectively, forcing those subscribers into its ad-based plan will no doubt douse it with accelerant.”
The strategy is more of a modified version of Amazon’s Prime Video ad tier rollout, which automatically enrolled all of its users when its ad tier debuted in January, immediately giving advertisers scale.