Netflix to scrap basic plan in Australia

In a cost of living blow for Aussies, the streaming service has unveiled yet another change to its plans with the axing of a popular option.

In a cost of living blow for Aussies, the streaming service has unveiled yet another change to its plans with the axing of a popular option. Picture: Olivier Doulier/AFP.

Netflix is scrapping the cheapest way to watch the service ad-free in Australia.

Announcing its third quarter financial results in the US, the company said it would cut its basic plan in a number of countries – including Australia – from next week.

The basic plan, which costs $10.99 a month – is currently the cheapest way to watch Netflix in Australia without ads.

Other plan options include ‘standard with ads’ for $6.99 a month, ‘standard’ for $16.99 a month and ‘premium’ for $22.99 a month.

The basic plan has been axed from Netflix's offering in Australia. Picture: Netflix Australia

The decision follows a successful move to axe its basic plan in the US, UK, Canada and Italy earlier this year for new and rejoining members, as it looks to grow advertising revenues by pushing customers looking for value onto plans with ads.

In its results, the company said that “building our ad membership so that Netflix becomes an essential buy for advertisers, which is key for advertising to become material to our business” was its “immediate priority”.

It added that memberships where the viewer has to endure ads have grown “nearly 70% quarter-over-quarter” and that memberships with ads now account for around 30 per cent of all new sign-ups in the 12 countries where Netflix has introduced ads.

“This growth has been driven by improvements to our offering … as well as the phasing out of our Basic plan for new and rejoining members in the US, the UK, Italy and Canada. This change boosted adoption of our ads and Standard plans and we’ll be making the same change in Germany, Spain, Japan, Mexico, Australia and Brazil next week.

Netflix Australia confirmed the change to news.com.au which will take effect from next Monday.

Netflix is scrapping the cheapest way to watch the service ad-free in Australia. Picture: Mario Tama/Getty Images)

A spokesperson for Netflix Australia told news.com.au: “From 23 October, we’re updating our plans in Germany, Spain, Japan, Mexico, Australia and Brazil so that new members, rejoiners, and existing members looking to switch plans, will have the choice of our Ads plan, as well as our ads free Standard and Premium plans.”

The spokesperson added: “Nothing will change for members currently on the Basic plan at this time.”

Netflix also announced pricing increases for some plans in the UK, US and France, to take effect immediately.

The Australian spokesperson did not comment on whether there are any plans to increase the prices of its Australian subscriptions in the future.

In August, it was revealed that the crackdown by Netflix on password sharing to boost subscriber numbers appears to have backfired, as new figures showed that subscribers fell for the first time since its launch in Australia in 2015.