Netflix Hikes Prices, Including Ad-Supported Plan, After Record Growth

Netflix is raising subscription prices in the U.S. and several other markets, including the first increase for its ad-supported plan. The company unveiled these changes alongside its Q4 2024 earnings report, which also revealed its largest-ever quarterly subscriber growth, adding 18.9 million new members.

In the U.S., the Standard plan without ads will rise by $2.50, increasing from $15.49 to $17.99 per month. This marks the first price hike for the Standard tier in three years, which allows for two HD streams. Additionally, Netflix's ad-supported plan will increase by $1, from $6.99 to $7.99 per month. The Premium plan, offering four simultaneous streams, will see a $2 increase, reaching $24.99 per month. The cost of adding an Extra Member to a primary account will also rise from $7.99 to $8.99 per month.

In its quarterly letter to investors, Netflix explained the price hikes: "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 reinvest to further improve Netflix." The price changes will take effect in the U.S., Canada, Portugal, and Argentina (the latter was already reflected in the company's October 2024 forecast).

Netflix Hikes Prices, Including Ad-Supported Plan, After Record Growth

On the earnings call, co-CEO Greg Peters defended the price increase for the Standard plan with ads, saying, “We believe that our starting price… is an incredible entertainment value. And it’s a highly accessible entry point.”

Netflix’s last major U.S. price hike took place in October 2023, when it raised the price of the Basic plan from $9.99 to $11.99 per month and increased the Premium plan from $19.99 to $22.99. At that time, the ad-supported plan remained at $6.99 per month, while the Standard plan stayed at $15.49 per month. The Standard plan had last been raised in January 2022.

The company also increased its 2025 revenue outlook to between $43.5 billion and $44.5 billion, up by $500 million from previous projections, and raised its operating margin forecast to 29%, an increase of one percentage point.

Paolo Pescatore, an analyst and founder of PP Foresight, commented, “Netflix reaffirms its leadership position and is absolutely running away in the streaming market... it is now flexing its muscles by adjusting prices given its far stronger and diversified programming slate compared to rivals.”

Though Netflix did not raise subscription prices in 2024, company executives had previously indicated that increases were possible. On Tuesday, Netflix reported that ad-supported plans accounted for over 55% of sign-ups in its advertising countries, and membership in the ad-supported tier grew nearly 30% quarter-over-quarter. Additionally, Netflix introduced a new “Extra Member With Ads” offering in 10 out of 12 ad-supported countries, providing more options for subscribers.

Looking ahead, Netflix is on track to reach significant scale with its ad-supported members in 2025, with a focus on improving its offering for advertisers to drive substantial growth in advertising revenue.