Netflix capped off 2024 with record-breaking subscriber growth, surpassing 300 million paid memberships for the first time. This achievement, fueled by a remarkable 19 million new subscribers in Q4 alone and a total of 41 million for the year, prompted a celebratory—yet unsurprising—announcement: another price increase. This marks the latest in a series of price adjustments, following similar hikes in 2023 and 2022, reflecting a pattern of roughly $1-$2 annual increases dating back to 2014.
Netflix's shareholder letter justified the price hike as necessary to fund continued investment in programming and enhance member value. The company stated that these price adjustments, impacting most plans in the U.S., Canada, Portugal, and Argentina, were already anticipated in their October 2024 guidance. While the letter didn't specify exact price changes, reports from The Wall Street Journal and Bloomberg suggest the following adjustments: the ad-supported plan rising from $6.99 to $7.99, the standard ad-free plan increasing from $15.49 to $17.99, and the premium plan climbing from $22.99 to $24.99.
Adding to the news, Netflix introduced a new "extra member with ads" plan. This allows users of the ad-supported tier to add an additional household member for a fee, a feature previously restricted to standard and premium plans.
Despite the price increase, Netflix reported strong financial results. Q4 revenue surged 16% year-over-year to $10.2 billion, mirroring the annual revenue growth of 16% to $39 billion. The company projects continued growth, forecasting a 12% to 14% year-over-year increase in revenue for 2025. While this will be the last quarter Netflix reports subscriber growth figures publicly, the company will continue to announce paid membership milestones.
