Netflix raises the prices of most of its subscriptions to support the company’s financial situation

Netflix announced that it will raise prices on most of its subscription categories in the United States and Canada after the streaming giant reported 19 million new subscribers in the last quarter of 2024, according to CNN.

A jump in the number of Netflix subscribers

The jump in the number of subscribers, which is the largest ever for Netflix, brings the giant company’s number of subscribers to 302 million worldwide, strengthening the company’s grip on first place in the industry.

Reasons for new success

Netflix attributed the recent jump success to a boxing match between Mike Tyson and Jake Paul in November, which it said attracted 108 million viewers worldwide, making it the most-streamed sporting event of all time.
Netflix subsequently hosted two NFL games on Christmas Day which averaged 30 million viewers globally, making it the most-streamed football match of all time.
Subscriptions were also boosted by the success of the second season of “Squid Game,” which is the platform’s largest premiere to date and attracted 68 million views in its first week. Earlier, Netflix also added live streaming of WWE Raw matches on Monday nights.
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Supporting Netflix’s financial situation

The price increases could help the company’s financials, with the standard ad-free monthly membership increasing from $15.49 to $17.99 while the highest premium tier which includes 4K video quality will rise by $2 to $24.99.

Message to Netflix investors

“As we continue to invest in programming and deliver more value to our members, we occasionally ask our members to pay a little more so we can reinvest to further improve the Netflix offering,” the company said in a letter to investors.
This price increase is the latest for consumers as streaming services increasingly increase monthly costs and push subscribers towards ad-supported plans at lower prices to increase profitability.
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In recent years, Disney, Max, Peacock, Apple, and others have raised their prices, and Netflix’s last price increase was in 2022.

Increasing Netflix revenues

The company announced a 16% increase in revenues in the fourth quarter, exceeding $10 billion for the first time in its history, while total operating income reached $2.3 billion, an increase of 52% year-on-year.
Netflix also announced a stock buyback worth $15 billion, and this led to a 13% rise in the company’s shares.
Tuesday’s earnings mark the last time Netflix will report paid membership numbers on a quarterly basis, noting that it will begin reporting “share reports” twice a year.

Strengthening dominance in the broadcast market

The rise in paid subscriptions is strengthening Netflix’s dominance in the streaming field. In recent years, media companies have pumped billions of dollars to keep pace with their traditional and new competitors.
While some competitors, including Disney and CNN’s parent company, Warner Bros. Discovery, have recently achieved profitability in streaming for the first time, rivals have had difficulty matching Netflix’s market share.
“We are fortunate that we do not face distractions such as managing other declining networks, and thanks to our focus and continued investment, we have an improving product and market presence around the world,” Netflix said in its earnings report.