Netflix raises prices including first hike on ad-supported tier

Netflix is ​​increasing subscription prices in the U.S. and other markets — including the first increase on its ad-supported plan.

The streamer revealed the price increases alongside its Q4 2024 earnings results on Tuesday, when it announced its biggest quarterly increase in subscribers to date, with a gain of 18.9 million for the period.

Under the new pricing in the US, Netflix’s standard ad-free plan will increase by $2.50 – from $15.49 to $17.99 per stream. month. It’s been three years since Netflix raised the price of the Standard tier, which provides two simultaneous HD streams.

Additionally, Netflix’s ad-supported tier will cost $7.99 per month, up $1 from $6.99. The price of the Premium level, with four simultaneous streams, will be $24.99 per month, an increase of $2. The cost of adding an additional member to a primary account increases from $7.99 to $8.99 per member. month.

“As we continue to invest in programming and deliver more value to our members, we will occasionally ask our members to pay a little more so we can reinvest to further improve Netflix,” the company said in its quarterly letter to investors. “To that end, we are adjusting prices today across most plans in the US, Canada, Portugal and Argentina (which was already factored into the 2025 guidance we provided in October 2024).”

On the earnings call with analysts, co-CEO Greg Peters said, “We think our starting price” for Standard With Ads — even after the price increase — “is incredible entertainment value. And it’s a very accessible entry point.”

In its last major US price increase, Netflix in October 2023 raised the price of the Basic plan from $9.99 to $11.99 per month in the US and raised the Premium price from $19.99 to $22.99. (In the US and several other markets, it no longer offers the Basic plan, with the “Standard With Ads” tier serving as the entry-level option.) At the time, the streamer’s ad-supported price remained at $6.99 per month in the US and the standard package remained at $15.49 per month. The last time Netflix raised the price in the US of the Standard plan was in January 2022.

With the announcement of the 4. quarterly earnings and price increases, Netflix raised its 2025 outlook for revenue to between $43.5 billion and $44.5 billion (up $500 million from its previous forecast) and for operating margin to 29%, up one percentage point in compared to the previous forecast. .

“Netflix confirms its leading position and is absolutely running away in the streaming market,” said Paolo Pescatore, analyst and founder of PP Foresight, commenting on Q4 earnings. “It is now flexing its muscles by adjusting prices given its far stronger and more diversified programming slate compared to its competitors.”

Netflix did not raise subscription prices in 2024, but executives said several times last year that rate increases were on the table.

On Tuesday, the company said that in Q4, ad-supported plans accounted for over 55% of signups in its ad countries, and ad plan membership grew nearly 30% quarter over quarter. Netflix also announced Tuesday an “Extra Member with Ads” offer in 10 of the 12 countries where it has an ad plan “to give our members additional choice and flexibility.”

“We are on track to reach sufficient scale for advertiser members in all our advertising countries by 2025. A top priority in 2025 is to improve our offering to advertisers so that we can significantly increase our advertising revenue,” the company said in its investor letter.