Courtesy of Netflix.
Netflix has decided to raise the prices of its subscriptions in the U.S. and other markets, marking the first price increase for its ad-supported plan. The new prices, revealed alongside Netflix’s fourth-quarter 2024 earnings, reflect the company’s effort to invest further in programming and content, all while continuing to provide more value for its subscribers.
Starting now, Netflix's Standard plan, which offers two simultaneous HD streams and no ads, will cost $17.99 per month, up from $15.49. This is the first price hike for this plan in three years. Additionally, the ad-supported plan will now be priced at $7.99 per month, an increase of $1 from the previous $6.99. The Premium tier, which allows for four simultaneous streams, will cost $24.99 per month, up by $2. Also, the cost for adding an Extra Member to a primary account will rise from $7.99 to $8.99 per month.
In a letter to investors, Netflix explained that these price increases would help support its investments in more programming. “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 company stated.
The decision to raise prices comes after a significant surge in subscriber numbers. Netflix reported gaining 18.9 million new subscribers in Q4 2024, its highest quarterly increase ever. These results are a positive sign for the streaming giant as it faces increasing competition in the crowded streaming market.
Netflix’s co-CEO, Greg Peters, discussed the pricing adjustments during an earnings call, emphasizing the value of the ad-supported Standard plan. He mentioned, “We believe that our starting price for Standard With Ads — even after the price increase — is an incredible entertainment value. And it’s a highly accessible entry point.”
This price hike follows a significant increase in October 2023, when Netflix raised its Basic plan to $11.99 per month and the Premium plan to $22.99. Since then, the Basic plan has been replaced by the ad-supported Standard tier, which is now the entry-level option for new subscribers.
Netflix is also making strides in the advertising space. In Q4, over 55% of sign-ups in countries with ad-supported plans were for these lower-cost options. Membership for ad-supported plans grew nearly 30% from the previous quarter. To offer more flexibility, Netflix introduced the "Extra Member With Ads" option in 10 of the 12 countries where it has an ad-supported plan. The company aims to expand its advertising business significantly in 2025.
Despite not raising subscription prices in 2024, Netflix executives had hinted that price hikes would be on the horizon. The company has also increased its revenue outlook for 2025, predicting it will earn between $43.5 billion and $44.5 billion, up by $500 million from its previous forecast. Operating margins are expected to reach 29%, an increase of one percentage point.
Industry analyst Paolo Pescatore commented on Netflix’s performance, saying, “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.”
