Australian subscribers should watch for price hikes following Netflix’s announcement yesterday that it will increase prices across most subscription tiers in the US and Canada.
Record-breaking quarter
The streaming service enjoyed a record-breaking quarter to close out 2024, adding 19 million new subscribers.
The surge brings Netflix’s global subscriber base to 302 million, cementing its position as the leading streaming platform, with competitors like Disney and Warner Bros. Discovery trailing by some distance.
In its earnings report, Netflix revealed revenue of more than $10 billion for the first time, a 16% year-on-year increase, with operating income rising 52% to $2.3 billion. The company also announced a $15 billion stock buyback, boosting shares by 13% on Tuesday.
Co-CEO Ted Sarandos highlighted Netflix’s success with live events and sports during the earnings call, stating, “We had an incredible fight, two NFL games and one of our biggest TV series ever in ‘Squid Game’ season two — all very successful events that we are thrilled about.”
The return of 'Squid Game' drew 68 million views in its first week.
The ‘incredible fight’ Sarandos refers to was the boxing match in November between Mike Tyson and Jake Paul that drew 108 million viewers, making it the most-streamed sporting event in history.
In North America, the service hosted two NFL games on Christmas Day, which averaged 30 million global viewers each.
The company’s strategy is to lean into these live events as a key driver for growth, with sport playing a pivotal role in the plans for expansion.
Subscriptions to rise
Effective immediately, the standard monthly subscription without advertisements will rise from US$15.49 to US$17.99, while the ad-supported plan increases by US$1 to US$7.99. The premium tier, featuring 4K video quality, will see a US$2 hike to US$24.99.
Netflix last raised its prices in 2022.
“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,” the company said in a letter to investors.
The price hike comes amid broader industry trends of rising subscription costs as streaming services seek profitability.
Netflix plans to transition from quarterly to biannual reporting on paid memberships, introducing an “engagement report” to provide updates.