Netflix announced a price increase for most subscription tiers in the US and Canada, driven by a record-breaking fourth quarter of 2024 with 19 million new subscribers. This surge in subscribers, fueled by popular live events, the second season of 'Squid Game', and the addition of WWE 'Raw' broadcasts, solidified Netflix's position as the leading streaming platform.
Netflix announced on Tuesday, January 22, 2025, that it will be raising prices on most of its subscription tiers in the US and Canada. This price increase comes on the heels of a record-breaking fourth quarter of 2024, where Netflix added 19 million new subscribers, bringing its global total to 302 million. This surge in subscribers solidifies Netflix's position as the leading streaming platform in the industry. Several factors contributed to this impressive subscriber growth.
Netflix's live broadcasts of major sporting events, such as the November fight which drew 108 million viewers worldwide and two Christmas Day NFL games averaging 30 million global viewers, significantly boosted viewership. Additionally, the highly anticipated second season of 'Squid Game' premiered to massive success, attracting 68 million views in its first week. The platform further expanded its offerings by adding live broadcasts of WWE 'Raw' on Monday nights. The price increases will see the standard monthly membership without advertisements rise from $15.49 to $17.99, while the standard plan with ads will increase by one dollar to $7.99. The premium tier, which includes 4K video quality, will experience a $2 increase to $24.99. Netflix justifies this price hike by stating that it will allow them to continue investing in programming and deliver even more value to their members. This move aligns with a broader trend in the streaming industry, where platforms like Disney, Max, Peacock, and Apple have recently raised their prices. The price increase is the latest for consumers as streaming services increasingly ratchet up monthly costs and push subscribers toward lower-priced ad-supported plans to increase profitability. Netflix last increased the price of its standard plan in 2022. The company reported a 16% revenue increase last quarter, surpassing $10 billion for the first time in its history, while operating income reached $2.3 billion, a 52% year-on-year increase. Netflix also announced a $15 billion stock buyback, sending shares soaring 13% Tuesday afternoon. During the company's investor call, Ted Sarandos, Netflix co-chief executive, highlighted the streamer's recent success with live sporting events. He stated that even in an exceptional quarter with three major live events — a significant fight, two NFL games — and the release of a record-breaking TV series, 'Squid Game' season two, the company continues to explore opportunities in the live events business, particularly in sports. However, he emphasized that sports is just one aspect of their expansion strategy within the live events sector. Tuesday's earnings marked the final time Netflix will publicly report its paid membership figures on a quarterly basis. Instead, the company announced it will begin reporting a twice-annual 'engagement report' with updates. The surge in paid subscriptions solidifies Netflix's dominance in the streaming landscape. Over the past few years, traditional media companies have invested billions in launching their own streaming services to rival Netflix as their cable and broadcast businesses decline. While some competitors, including Disney and Warner Bros. Discovery (CNN's parent company), have recently achieved profitability in the streaming space for the first time, they have yet to match Netflix's market share. Netflix attributes its success to its lack of distractions managing declining linear networks and its continued investment in product development with a focus on global reach.
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