Netflix Announces Price Hikes After Record Subscriber Growth
Netflix is raising prices on most of its subscription tiers in the US and Canada following its largest-ever subscriber boost. The streaming giant added a remarkable 19 million new subscribers in the final quarter of 2024, bringing its total global subscribers to 302 million. This surge solidifies Netflix’s position as the industry leader.
Key Drivers Behind Netflix’s Subscriber Surge
Netflix credited its subscriber growth to a series of successful events and content. The highly anticipated Mike Tyson and Jake Paul boxing match in November attracted 108 million viewers globally, setting a new record for the most-streamed sporting event in history. The platform followed up with two Christmas Day NFL games, which averaged 30 million global viewers, making them the most-streamed football games ever.
Additional boosts came from the success of Squid Game season two, which became Netflix’s biggest premiere to date with 68 million views in its first week. The platform also expanded its content offering with live broadcasts of WWE Raw on Monday nights.
Upcoming Price Increases
In light of these successes, Netflix is raising prices across its tiers. The standard monthly membership (without ads) will increase from $15.49 to $17.99. The standard ad-supported plan will rise by $1 to $7.99, and the premium tier, which includes 4K video quality, will see a $2 increase to $24.99.
In a letter to investors, Netflix explained, “As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can reinvest to further improve Netflix.”
Streaming Price Increases Becoming Common
Netflix’s price hike follows a broader trend in the streaming industry, as platforms work to balance rising content costs with profitability. Other streaming services such as Disney+, Max, Peacock, and Apple TV have also increased their subscription prices in recent years. Netflix last raised its standard plan pricing in 2022.
Strong Financial Performance
Netflix’s financial results reflect its growing subscriber base. The company reported a 16% increase in revenue, surpassing $10 billion for the first time in its history. Operating income reached $2.3 billion, a 52% year-over-year increase. Netflix also announced a $15 billion stock buyback program, causing shares to rise by 13% on Tuesday.
Ted Sarandos, Netflix’s co-CEO, highlighted the impact of live sporting events on their success. “Even in an amazing quarter where we had three huge live events—an incredible fight, two NFL games—we had one of our biggest TV series ever in Squid Game season two,” he said. Sarandos emphasized that live events and sports would continue to be a key focus for Netflix’s growth strategy moving forward.
Changes to Subscriber Reporting
This will be the last time Netflix publicly reports its paid membership figures on a quarterly basis. Moving forward, the company will release a semi-annual “engagement report” instead.
Netflix’s Continued Dominance in Streaming
Netflix’s substantial growth sets it apart from its competitors, despite the billions that traditional media companies have poured into their own streaming services. While rivals like Disney and Warner Bros. Discovery have started turning a profit in the streaming space, none have been able to match Netflix’s market share.
“We’re fortunate that we don’t have distractions like managing declining linear networks,” Netflix stated in its earnings report. “With our focus and continued investment, we have good and improving product/market fit around the world.”
Netflix’s price increase and subscriber growth mark a significant moment in the streaming wars, as the company continues to lead in both viewership and content innovation.
