After introducing the account sharing fee, Netflix is apparently working on the next change. In Canada, the company has eliminated the basic subscription, which amounts to a hidden price increase and poses problems for some users.
Netflix wants a paid subscription to be used only by members of a household. For this reason, customers now have to register their devices, otherwise they no longer have access to the streaming service. As a result of this adjustment, many customers around the world have chosen to either pay the account sharing fee, which allows access for another user outside the household, or have switched to their own subscription, such as the basic subscription. The latter is particularly useful for those who use Netflix alone and are satisfied with HD quality when streaming. But Netflix apparently wants to cancel this subscription.
Netflix cancels basic subscription in Canada
In Canada, the streaming provider has already announced this step and removed the basic subscription from the booking page for new customers. A company spokesman told the news portal “CT News” also said that the subscription would also be canceled for existing users “in the near future”. For subscribers, this means that they either switch to an advertising-financed subscription or have to accept significantly higher costs. Because while the basic subscription in Canada is $9.99 a month, the standard subscription costs $16.46. It would be the next tier up if users don’t want a subscription with ads, which costs $5.99 in Canada.
The step comes as a surprise and should be a severe blow for many subscribers. Since account sharing is no longer allowed, many Netflix customers see the basic subscription as a solution. After all, this is intended specifically for use by one person. So why is Netflix making cuts here?
The answer to the question might simply be money. Netflix is certainly hoping for significantly increased income in the long term by canceling the basic subscription. Be it by switching to the more expensive standard subscription or by increased demand for the advertising-financed subscription as the only existing alternative under 10 dollars. Here the streaming provider fades in four to five minutes of advertising per hour – both within and before the start of a stream. For many providers, advertising is a lucrative business that is well paid. Through various advertising deals, they can significantly increase their income. And Netflix desperately needs that, because the provider has been in the red for years and is constantly getting into debt by purchasing expensive licenses and producing its own content.
Will the basic subscription disappear in other countries?
Netflix likes to test innovations in the subscription structure and the offer in smaller markets. These include Canada, where the fee for account sharing was implemented in February. Now Canadian customers are hitting it again first. In view of the rapid spread last time, it is not unreasonable that Netflix is expanding its current change to other countries as well. However, that will depend on how the situation in Canada develops and how customers there react to the cancellation of the basic subscription.
For Germany, at least at this point in time, no concrete plans are known. When asked by TECHBOOK, we were only told that it was not possible to make any statements about trends in Germany or other countries at the current time.
But that doesn’t mean that Netflix isn’t canceling the basic subscription in this country too. According to our current TECHBOOK survey, the advertising-financed offer should not be a real alternative for German customers – this is not exactly popular with them due to the advertising and the limited offer. But who knows what it will look like when the cheapest plan with no ads is suddenly the standard plan? This costs EUR 12.99 per month in Germany and is therefore EUR 5 more expensive than the basic subscription or EUR 8 more expensive than the advertising-financed subscription.
TECHBOOK means
“I can well understand that providers have to change their offers in order to be able to operate profitably in the future. But what Netflix has been asking its customers to do in the past few months is a bit much. First, the password-sharing fee that drives users to buy their own subscriptions. The logical choice – the basic subscription for single use – is then deleted. What shoud that? In Canada, users may be used to dealing with advertising differently than in the USA. In Germany, the elimination of the basic subscription would be a hammer – in a negative sense. Because for many customers, advertising in their streaming subscription is not an alternative to the ad-free offers. But they would have to dig much deeper into their pockets for this. I can imagine Netflix losing some customers if they don’t also make a huge leap in offering, where really exciting innovations have been rare to find lately.” – Rita Deutschbein, Editor-in-Chief