Netflix increases subscription prices, driving stock surge

Netflix adds 19 million subscribers, reaching 302 million globally, maintaining its market lead despite rise in prices

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Netflix has announced a price hike for most of its subscription plans in the US and Canada following its record-breaking subscriber growth in the last quarter of 2024.

The streaming giant added 19 million new subscribers, bringing its global total to 302 million.

The surge in subscribers is Netflix's largest-ever, driven in part by the massive popularity of live events such as the Mike Tyson vs Jake Paul boxing match, which drew 108 million viewers, making it the most-streamed sporting event in history.

The platform also saw record-breaking viewership for two Christmas Day NFL games, as well as the release of "Squid Game" season two, which had 68 million views in its first week.

Netflix shares listed in Frankfurt rose 14.3% in early trading on Wednesday after the streaming service said on Tuesday it attracted a record number of subscribers over the holiday quarter.

The company said it plans to hike prices in the US, Canada, Portugal and Argentina after adding 18.9 million subscribers in its fourth quarter.

The company's shares rose 10% in after-hours trading on Tuesday, having closed up 1.35% in regular trading.

The price increase will see the standard monthly membership without advertisements rise from $15.49 to $17.99, while the ad-supported version will increase by $1 to $7.99. The premium plan, which includes 4K quality, will increase by $2 to $24.99.

Netflix explained the price hike as a necessity to continue investing in new programming and to improve its service. The company also reported a 16% increase in revenue last quarter, surpassing $10 billion for the first time, with operating income of $2.3 billion. The announcement sent Netflix’s shares up by 13%.

The move to increase prices is in line with the broader trend in the streaming industry, with other services such as Disney, Max, and Apple also raising their subscription costs. Netflix last raised its prices in 2022.

In addition to these changes, Netflix will no longer report paid membership figures quarterly. Instead, it will release a semi-annual "engagement report" moving forward.

Ted Sarandos, Netflix’s co-CEO, highlighted the company’s growing focus on live events and sports as part of its strategy for future expansion. Netflix continues to solidify its dominance in the streaming market, despite increasing competition.