Netflix has announced price increases for many plans. They've seen subscriber growth but this change to monthly fees could make big changes within viewing.
Subscriber Growth and Profitability
Netflix had their highest recorded subscriber growth in 2024 with 19 million new subscribers which increased their total to 302 million across the world. The recent additions has now set Netflix as a strong lead in the market for streaming services. Their success came from a high viewership on original shows and even adding live sports to their format.
Revenue Increase
Netflix reported revenue increases at 16% exceeding 10 Billion dollars during their report while the operating income totaled $2.3 billion representing 52% growth. Their growth seems substantial in multiple areas while providing even better data points to showcase a successful business venture.
Subscription Price Changes
As a result of increased growth and need for investing they will increase rates for most subscriptions within the United States and Canada. The price increase affects three specific tiers, which creates an immediate change in cost for subscribers.
Standard Plan Adjustments
A standard monthly subscription plan which has no advertisements will now increase to $17.99 from $15.49 a month. The addition of advertisements on a standard tier will have a rate of $7.99 per month which was a previous rate of $6.99 per month. These increases impact almost every customer.
Premium Plan Pricing
The highest priced premium plan is set to increase by $2 going from $22.99 per month to $24.99 a month. This change provides users who like the 4k version to also participate in the need for more investments for the platform.
Justification for the Increases
Netflix justified this need to raise pricing with the idea that they need to continue making great content that holds the attention of new and old members. The main idea was to maintain consistent quality in programming that users enjoy and be willing to pay for through their platform as they add and experiment with new content and new formats like live sports. This was also put in place as a way for investors to understand they are always willing to make choices that will be for long term growth within Netflix.
"Extra Member" Fee
A new "Extra member with Ads" option will soon be tested in 10 countries giving users the option of adding a non household member on a existing account for a low fee if that added member watches a subscription plan with advertisements. The normal "extra member" pricing will now go from $7.99 to $8.99 for the accounts without ads.
Reasons For Price Hikes
It is stated Netflix needs more funding to continually grow the business and continue producing high value programming. It is common place for other streamers to raise pricing and force lower ad versions to remain profitable.
Impact of Live Events and Content
The success of programs like "Squid Game" as well as other live sporting events such as Boxing and Football has impacted subscribers greatly. Viewers are engaged and watch various platforms that provide great content like NFL games averaging 30 million viewers per event or the Mike Tyson vs Jake Paul fight at 108 million worldwide which were showcased for first time streaming on Netflix.
Ending Quarterly Reports
After a decade of sharing quarterly updates, Netflix will stop publishing figures to public audiences and will instead transition to twice a year "engagement report" model. While it’s an interesting turn of events they plan on still giving major milestones in membership increases. The goal is to allow public opinions to see the company has moved into a stage of strong growth and can continue to thrive.
Competition in Streaming Services
Other streaming services such as Hulu, Apple+, Max and Disney have all continued to raise prices in attempts to stay above the market trend. Legacy media are having to take on the task of managing linear TV and digital streaming to keep all parts of business growing for more opportunity. Netflix feels unique to this challenge in a position of only having to focus on a subscription format.
Subscriber Response
It has been reported that while subscription plans are continuing to grow many viewers have pushed back on price increases and have sought new services to take advantage of new offerings in entertainment.
Affordability and Ad Supported Plans
It is also interesting to note that lower price tier ad supported versions make a strong place for subscribers who need a budget friendly choice that is a lower price. Many viewers are looking for ways to find similar content without the higher pricing.
Key Takeaways
- Netflix is raising prices on most of its subscriptions.
- The reasoning comes from a successful quarter with a goal to help them grow while still being profitable.
- The "Standard" no ad plan will increase to $17.99 from $15.49, and "Premium" will be $24.99 from $22.99
- "Standard" with adds plan increases to $7.99 from $6.99 with a plan available for outside members with added pricing per profile.
- Netflix plans to stop providing a quarterly report and move to a new twice a year data release on their growth and overall viewership.