Netflix (NASDAQ: NFKX) has announced a new round of price increases for its subscription plans in the United States, marking the first hike for its ad-supported tier. This decision comes on the heels of the company’s impressive performance in Q4 2024, where it reported a record gain of 18.9 million subscribers.
On January 21, 2025, Netflix will implement price increases across all its subscription tiers. The Standard Plan (Ad-Free) will rise from $15.49 to $17.99 per month, while the Ad-Supported Plan will increase from $6.99 to $7.99 per month. The Premium Plan, which allows for four simultaneous streams, will see a jump from $22.99 to $24.99 per month. Additionally, the fee for adding an extra member will increase from $7.99 to $8.99 for ad-free plans, although the cost remains unchanged for the ad-supported plan at $6.99. This marks a significant adjustment for Netflix, particularly as it has not raised the price of its Standard plan since January 2022.
In its quarterly letter to investors, Netflix emphasized its commitment to enhancing programming and delivering greater value to subscribers. 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.” This reflects a broader strategy aimed at maintaining competitive positioning within the rapidly evolving streaming landscape.
Co-CEO Greg Peters defended the price increases during an earnings call, asserting that even after the adjustments, the Standard With Ads plan remains an “incredible entertainment value” and accessible entry point for viewers.
The recent subscriber surge has brought Netflix’s total global subscriber count to approximately 302 million, reinforcing its status as a leader in the streaming market. The company also reported a 16% increase in revenue, surpassing $10 billion for the first time in its history, with operating income climbing significantly year-over-year.
Analysts view these developments positively. Paolo Pescatore of PP Foresight remarked, “Netflix reaffirms its leadership position and is absolutely running away in the streaming market,” noting that the company is leveraging its diverse programming offerings to justify price increases.
While Netflix did not implement any price hikes in 2024, executives had indicated last year that adjustments were likely on the table. The timing of this increase is particularly notable as Netflix expands its offerings into live programming and continues to enhance its ad-supported tier, which accounted for over 55% of sign-ups in Q4.
The introduction of an “Extra Member With Ads” option across ten countries also illustrates Netflix’s strategy to provide flexible choices for consumers while boosting advertising revenue, a key focus area moving forward.
