Why Netflix is hitting more Aussie customers with ads

Well, it’s happening. If you have a “basic” Netflix plan (previously the cheapest option at $10.99 per month) you’re about to be hit with ads for the first time – or hit up for more money if you want to stay ad-free.

This cost-effective membership plan was discontinued for new and returning customers in 2023, but has since been held as a legacy option for existing users. It has already been phased out in other countries including the US, France and Brazil. Now, Australian customers are being notified their accounts will automatically roll over to ad-supported versions.

Australian Netflix customers on a basic plan will have to pay $8 per month to watch shows like Squid Game ad-free.Credit: Netflix

The good news? As the company said in its email to customers, “You’ll save 35 per cent with your new monthly plan”. Those with an existing basic plan will automatically be switched to the current cheapest option, “standard with ads”, for $7.99 per month.

It also allows you to watch on two household devices at the same time (formerly only one), with better video quality (full HD rather than standard definition).

The catch? “A few short ads [that are] designed to not interrupt you during a scene”. Although, Netflix noted, there will be no ads on kids’ profiles.

If you would like to avoid all ads on your nightly binge, Netflix users will have to upgrade to the significantly more expensive “standard” plan, which will set you back $18.99 per month, or the “premium” plan at $25.99 per month. The former offers the same image quality and number of devices but the latter plays in ultra HD and allows you to stream on four devices simultaneously.

One customer posted her email from the company on social media, labelling the move as “money hungry”, arguing the $8 jump to maintain an ad-free viewing experience was unreasonable.

Ad-free access to on-demand content was, after all, the initial premise of the platform. And many customers are simply used to having free content with ads or paid content without. Paying for ads can feel like the worst of both worlds.

But it’s increasingly common. Rival platforms such as Paramount+ and Amazon Prime Video also offer ad-supported plans alongside more expensive ad-free versions. And the revenue gained is helping boost companies in an increasingly crowded subscription market.

When contacted for comment, Netflix pointed to a statement from a recent shareholders’ letter: “As we seek to grow engagement and deliver more value to our members, we’re also working to improve our monetisation by refining our plans and pricing. Key is ensuring that we have a range of prices and plans to meet a variety of needs.”

It’s certainly true, in a cost-of-living crisis, that people want a cheaper product. The ad-supported plan reportedly accounts for about half of all new sign-ups to the platform in the countries where it’s available. But the question of what constitutes the best “value” for members is up for debate.

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