Key Takeaways:
- Netflix announces new subscription price hikes across multiple plans in the U.S., including a $2.50 increase for the Standard plan.
- The ad-supported tier sees its first-ever price rise, now costing $7.99 per month.
- Netflix continues to lead the streaming market, with its Q4 2024 earnings highlighting record-breaking subscriber growth.
Netflix has announced subscription price increases across its U.S. plans, including the first-ever hike for its ad-supported tier. This move accompanies the streamer’s Q4 2024 earnings report, which revealed a record-breaking 18.91 million new subscribers, bringing its total global subscriber base to over 301 million.
Updated Pricing Breakdown
Starting immediately, U.S. subscribers will see the following changes:
- Standard Plan (no ads): Increased by $2.50 to $17.99/month. This plan supports two simultaneous HD streams.
- Ad-Supported Plan: Increased by $1 to $7.99/month, marking its first price hike since launch.
- Premium Plan: Increased by $2 to $24.99/month, allowing four simultaneous streams.
- Extra Member Add-On: Increased from $7.99 to $8.99/month.
Netflix justified these increases as part of its strategy to reinvest in programming and deliver more value to its members. In a letter to investors, the company stated, “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 re-invest to further improve Netflix.”
Why the Price Hikes?
Co-CEO Greg Peters addressed the changes, highlighting the Standard With Ads plan as an “incredible entertainment value” even after the price increase. The company’s focus on delivering a diversified and robust content slate has bolstered its position as the market leader in streaming.
Subscriber Growth and Q4 2024 Highlights
Despite these price increases, Netflix has shown no signs of slowing down in subscriber growth:
- Netflix added 18.91 million subscribers in Q4 2024, bringing its global total to 301 million.
- Over 55% of new sign-ups in ad-supported countries opted for ad-based plans, with memberships on these plans growing nearly 30% quarter-over-quarter.
In addition to pricing changes, Netflix launched an “Extra Member With Ads” offering in 10 of its 12 ad-supported countries, providing subscribers with more flexibility and choice.
Financial Outlook and Market Dominance
Netflix raised its 2025 revenue forecast to $43.5-$44.5 billion, an increase of $500 million from its previous estimate. The company also anticipates a 29% operating margin, up one percentage point from prior guidance.
“Netflix reaffirms its leadership position and is absolutely running away in the streaming market,” said Paolo Pescatore, analyst and founder of PP Foresight. “It is now flexing its muscles by adjusting prices given its far stronger and diversified programming slate compared to rivals.”
Ad-Supported Plan Success
Netflix’s ad-supported plans have been a major growth driver. The company reports that it is on track to achieve sufficient scale for its ad-based memberships in 2025, with plans to improve offerings for advertisers and grow advertising revenue substantially.
What’s Next for Netflix?
Looking ahead, Netflix aims to:
- Continue investing in high-quality, diverse programming.
- Scale its ad-supported plans across global markets.
- Enhance its offerings for advertisers to drive additional revenue.
With a strong content lineup and bold pricing strategies, Netflix solidifies its dominance in the streaming market as it enters 2025.
