Netflix announced significant price hikes for most of its subscription plans in the United States and select international markets on Tuesday. The decision follows a historic fourth quarter in which the streaming giant added 19 million subscribers globally, marking its largest-ever quarterly increase. The company now boasts 302 million subscribers worldwide, solidifying its leadership in the streaming industry.
The price adjustments will see the U.S. standard ad-free plan rise from $15.49 per month to $17.99, while the ad-supported tier will increase from $6.99 to $7.99. The premium plan, offering 4K video quality, will climb from $22.99 to $24.99. Similar changes are set to roll out in Canada, Portugal, and Argentina.
The surge in subscribers was largely fueled by high-profile content and events, including the Mike Tyson and Jake Paul boxing match in November, which drew a record-breaking 108 million global viewers, making it the most-streamed sporting event in history. Additionally, Netflix's live coverage of two NFL games on Christmas Day garnered an average of 30 million global viewers. Meanwhile, the much-anticipated second season of "Squid Game" ranked as the platform's third-most-watched TV season, further driving subscriber growth.
The company's financial performance mirrored its subscriber gains, with Netflix reporting a 16% increase in quarterly revenue, exceeding $10 billion for the first time. Operating income also rose by 52% year-over-year, reaching $2.3 billion. The news sent Netflix's stock surging 13% on Tuesday.
The price hikes come as Netflix navigates a fiercely competitive streaming landscape. By increasing subscription fees, the company aims to sustain its aggressive content investments while maintaining profitability. The decision, however, risks alienating some subscribers, particularly as inflation and competition weigh on consumer budgets.
The earnings report also marked the last time Netflix will disclose quarterly subscriber numbers. The company announced it will shift to highlighting key milestones instead. This move aligns with the broader industry trend of focusing on revenue and profitability metrics over raw subscriber counts.
Despite the challenges, Netflix's content strategy appears to resonate with audiences globally. The company's dominance in both original programming and live events positions it to retain a significant share of the market, even amid rising costs.
Analysts noted that the company's growth trajectory suggests many subscribers are willing to absorb price increases. Still, the hikes underscore the balancing act Netflix faces between monetizing its platform and retaining its broad audience base.
