Netflix has made headlines once again as the company announced significant price increases across its subscription plans, coinciding with record subscriber growth reported for the fourth quarter of 2024. Starting today, the ad-supported Standard plan will cost $7.99 per month, up from $6.99, the Standard plan without ads will rise to $17.99 from $15.49, and Premium subscribers will now pay $24.99 instead of $22.99. These adjustments will affect customers across the United States, Canada, Portugal, and Argentina.
This price hike follows impressive financial performance, with Netflix reporting the addition of 18.9 million subscribers during the last three months of the year, vastly exceeding analyst expectations of 9.6 million. The streaming giant now boasts approximately 302 million paid subscribers globally. With revenues hitting $10.25 billion, Netflix not only surpassed the anticipated $10.11 billion but also marked its first year surpassing $10 billion in operating income.
Netflix's Q4 performance was driven by major content releases and live events. The second season of its hit series, Squid Game, has become one of the most-watched seasons ever, alongside blockbuster events such as the Jake Paul versus Mike Tyson boxing match and two highly popular NFL games streamed on Christmas Day. This diverse array of offerings helped propel subscriber numbers to historic levels.
During the earnings call, Netflix co-CEO Greg Peters emphasized the company’s approach to content, saying, "No single title really drives a majority of our engagement; we really have built the business on variety and quality." Peters noted the success has not been isolated to one program, highlighting the overall appeal of Netflix’s vast content library.
The price increase is partly justified by Netflix's intention to continue investing heavily in programming. The company explained, "We will occasionally ask our members to pay a little more so we can reinvest to improve Netflix." This move follows previous price adjustments earlier this year when Netflix discontinued its ad-free Basic subscription, effectively increasing costs for viewers who prefer no advertisements.
Netflix's pricing evolution has drawn interest and concern from subscribers. Opinions are mixed, with some viewing the hikes as necessary to maintain quality and expand offerings, and others as excessive. Interestingly, more than 55% of new subscribers are opting for ad-supported plans since their introduction, reflecting changing consumer preferences.
Financial analysts noted the stark growth quarter-over-quarter, with Netflix having gained 5.1 million subscribers previously and strategically implementing measures like cracking down on password sharing during 2024. This contributed to renewed customer acquisition but warrants caution as some experts believe the initial surge from stopping password sharing may diminish over time.
This latest financial quarter will also be the last which Netflix provides regular subscriber counts. The company announced plans to switch to reporting only major milestones and stated it would publish biannual engagement reports moving forward, starting with updates tied to specific earnings reports.
For 2025, Netflix projects revenues between $43.5 billion and $44.5 billion, showcasing confidence against the backdrop of fierce competition within the streaming industry. The upcoming year will see returning seasons for fan-favorite series like Stranger Things and Wednesday, as well as new initiatives involving live programming and innovative gaming experiences.
While preparing for continued expansion, Netflix is adjusting its strategies, particularly with ambitions to grow its ad business. Co-CEO Ted Sarandos mentioned the expectation of no meaningful disruptions to their content production schedule due to the recent wildfires affecting Los Angeles.
Netflix’s position as a leader within the streaming market remains solid, with shares soaring nearly 15% following the announcement of subscriber additions and price hikes—further instilling investor confidence.