Netflix announced Tuesday it will raise prices on most of its subscription tiers in the US and Canada after the streaming giant reported 19 million new subscribers in the last quarter of 2024.
The jump in subscribers, Netflix’s biggest-ever, puts the streaming giant at 302 million globally, solidifying the company’s hold on the top spot in the industry.
Netflix attributed the service’s latest success to the Mike Tyson and Jake Paul boxing match in November, which it said drew 108 million viewers worldwide, making it the most-streamed sporting event ever. Netflix later hosted two Christmas Day NFL games, which averaged 30 million global viewers, making them the most-streamed football games in history.
Subscriptions were also buoyed by the success of “Squid Game” season two, the platform’s biggest premiere to date, which drew 68 million views in its first week. Earlier this month, Netflix also added WWE “Raw” live broadcasts on Monday nights.
The price increases announced Tuesday will see the standard monthly membership without advertisements increase from $15.49 to $17.99, while a standard account with ads will rise one dollar to $7.99. Its highest-priced premium tier, which includes 4K video quality, will increase by $2 to $24.99.
“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 is the latest for consumers as streaming services increasingly ratchet up monthly costs and push subscribers toward lower-priced ad-supported plans to increase profitability. In recent years, Disney, Max, Peacock, Apple and others have all raised their prices. Netflix last increased the price of its standard plan in 2022.
The company on Tuesday reported its revenue increased 16% last quarter, exceeding $10 billion for the first time in its history, while operating income totaled $2.3 billion, a 52% on-year increase. Netflix also announced a $15 billion stock buyback. The news sent shares soaring 13% Tuesday afternoon.
On the company’s investor call, Ted Sarandos, Netflix co-chief executive, underscored the streamer’s recent success with live sporting events.
“Even in an amazing quarter where we had three huge live events — we had an incredible fight, two NFL games — we had one of our biggest TV series ever in ‘Squid Game’ season two, all very successful events and titles that we are thrilled about,” Sarandos said.
Sarandos added the company will continue to look to live events and sports for future growth.
“If there was a path where we could actually make the economics work, for both us and the league, we certainly would explore,” Sarandos said. “But, right now, we believe that the live events business is where we really want to be, and sports is a very important part of that, but it is a part of that expansion.”
Tuesday’s earnings marks the final time Netflix will publicly report its paid membership figures on a quarterly basis. Instead, the company said it will begin reporting a twice annual “engagement report” with updates.
The surge in paid subscriptions cements Netflix’s dominance in the streaming space. In recent years, legacy media companies have poured billions into launching their own streaming services to compete with Netflix as their traditional cable and broadcast businesses wither.
While some competitors, including Disney and CNN’s parent company Warner Bros. Discovery, have recently reached profitability in the streaming space for the first time, the rivals have struggled to match Netflix’s market share.
“We’re fortunate that we don’t have distractions like managing declining linear networks and, with our focus and continued investment, we have good and improving product/market fit around the world,” Netflix said in its earnings report.
Source: CNN
--Agencies
