Netflix has continually raised prices, and earns more from the ad plans than those paying more for zero ads.

Becoming a paying customer is just a negotiation with advertisers to raise their rates until Netflix concedes to what they want. Since they know you have more discretionary income Netflix can also charge more for ads. They're also incentivized into turning those customers into ad supported by increasing the no ad plan cost.

Which affects the decision making of the company. There are things they won’t platform for fear of offending an advertiser. The effect is pervasive, regardless of whether you are paying the full rate or not.