Netflix Announces Subscription Price Increase After Record Subscriber Growth
Netflix has announced subscription price increases across several countries following an impressive final quarter of 2024, which saw the streaming service add a record 19 million new subscribers.
The price increases will apply to users in the US, Canada, Argentina, and Portugal, although the UK is yet to confirm any changes. The price hikes come after a surge in viewership driven by high-profile events and popular programming, which helped Netflix solidify its position as the leading global streaming service.
In the US, the standard subscription with no ads will now cost $17.99, up from $15.49, while the ad-supported plan will increase by a dollar to $7.99. The premium tier, offering 4K quality, will see a rise to $24.99.
These price increases reflect Netflix’s strategy to reinvest in its content and programming, which the company argues justifies the higher fees. "We will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix,” the company said in a letter to investors.
Price increase follows impressive year for Netflix
The price hikes come on the back of a strong financial performance for Netflix. The company’s total revenue rose 16% in the final quarter of 2024, exceeding $10 billion for the first time in its history. Its operating income grew by 52%, reaching $2.3 billion, and the company’s net income nearly doubled to $1.9 billion. As a result, Netflix’s stock surged 13% in response to the earnings report, highlighting the company’s continuing dominance in the streaming industry.
Netflix's impressive subscriber growth was fueled by a series of high-profile events, including the boxing match between Jake Paul and Mike Tyson, which attracted 108 million viewers and became the most-streamed sporting event ever. Two NFL games streamed on Christmas Day also became the most-watched football games in history, with an average of 30 million viewers. Netflix also saw tremendous success with the second season of "Squid Game," which received 68 million views in its first week.
The company’s co-CEO, Ted Sarandos, emphasized that live programming is playing an increasingly important role in Netflix’s strategy moving forward. "If there was a path where we could actually make the economics work, for both us and the league, we certainly would explore," he said, adding that sports events and live broadcasts like WWE shows are part of the company’s ongoing expansion.
Despite concerns that price increases might lead to subscriber cancellations, Netflix is confident that its diverse and strong programming slate will prevent this. Analysts, including Forrester Research's Mike Proulx, argue that live events, especially sports, have become a “secret ingredient” for Netflix, helping the platform to stand out in a crowded streaming market. Proulx noted that services need to differentiate themselves to remain competitive, and Netflix’s programming choices are helping it do just that.
The streaming giant, which ended the year with more than 300 million subscribers globally, has now surpassed its own expectations, adding 41 million new subscribers in 2024, far exceeding the 36.6 million added during the pandemic in 2020. The company also revealed that it will no longer report its subscriber numbers quarterly, instead opting for a twice-yearly "engagement report" to provide updates on key milestones.
While Netflix is raising prices in select markets, it remains to be seen whether similar hikes will occur in other regions, such as the UK. With its ongoing investment in content and live events, the company is set to continue its growth trajectory and maintain its leadership position in the streaming space.
