Netflix Hikes Prices Amid Record Subscriber Growth

Netflix has achieved a remarkable milestone by surpassing 300 million subscribers, culminating the year with a total of 302 million paid members. This impressive growth was highlighted in their 2024 full-year earnings, where they reported a record-breaking addition of 19 million subscribers in the fourth quarter alone, and a total increase of 41 million throughout the year. Notably, this will be the final quarter that Netflix reports subscriber growth, although the company plans to continue sharing updates on paid memberships as significant milestones are reached.

However, alongside this celebratory news, Netflix announced another round of price increases across several of its plans in the United States, Canada, Portugal, and Argentina. This decision comes just over a year after the last price hike in 2023, marking a consistent pattern of annual price adjustments since the first increase in 2014.

In their shareholder letter, Netflix justified the price hikes by emphasizing their ongoing investment in programming and the value delivered to members. The statement read, "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." The company noted that these changes were already accounted for in their 2025 guidance provided in October 2024.

While the exact details of the price increases were not specified in the shareholder letter, reports from The Wall Street Journal and Bloomberg shed light on the new pricing structure. The ad-supported tier is set to rise from $6.99 to $7.99 per month, the standard ad-free plan will increase from $15.49 to $17.99 per month, and the premium tier will go from $22.99 to $24.99 per month.

In addition to these changes, Netflix introduced a new "extra member with ads" plan, allowing individuals on an ad-supported plan to add someone outside their household for an additional fee. This feature, previously exclusive to standard and premium plans, represents a strategic expansion of Netflix's offerings.

Financially, Netflix's performance remains robust, with a 16% year-over-year revenue increase to $10.2 billion in the fourth quarter and a similar annual growth to $39 billion. Looking forward, the company anticipates a year-over-year revenue growth of between 12% and 14% in 2025.