Netflix pulls lowest-price, ad-free plan for new, returning customers

By Rob Golum | Bloomberg

Netflix, which reports second-quarter financial results Wednesday after markets close in the US, stopped offering its lowest-priced commercial-free plan in the U.S. and UK.

The change means new or rejoining customers can no longer sign up for the $9.99 a month basic ad-free service. Subscribers who have that plan can stay with it, the company said.

The change will push consumers in one of two directions. Cost-conscious shoppers will be more likely to choose the cheaper plan with commercials, while people who want ad-free viewing will have to choose a pricier plan.

The cheapest ad-free plan is now priced at $15.49 a month in the US, according to a posting at the company’s website. The standard plan with advertising is priced at $6.99 monthly and the premium plan, which allows more users and offers ultra-high definition, is $19.99.

Netflix is pursuing a twofold strategy to accelerate revenue growth: It’s offering new customers a tier that includes advertising and cracking down on password sharing by encouraging subscribers to buy an added membership for friends or family members who use their accounts.