Price changes will apply to most plans in the US, Canada, Portugal and Argentina. This is the first price increase for the ad-supported tier. The last major price increase in the US took place in October 2023, when Netflix raised the price of its standard plan in the US from $9.99 to $11.99 per month, and increased the price of its premium plan from $19.99 to $22.99. In addition, Netflix is expanding its Extra Member With Ads offering in 10 of the 12 countries where the streaming platform has an advertising plan. This offering will continue to cost $6.99. Netflix cited the platform's increased investment in software development as the reason for the price increase.

Netflix shareholders, in a statement, argue the decision to increase plans with continued investment in programming development and improving the value of content delivered to subscribers on the platform. The increases are their 'request to customers' to help fund Netflix's growth.
Spencer Neumann, Netflix's chief financial officer, has confirmed that content spending will increase from $17 billion (in 2024) to $18 billion per year. This is as Netflix builds out its live and original programming in each region and looks for more licensing opportunities.

The company invested in more live sporting events, including the Mike Tyson vs. Logan Paul fight, the NFL's Christmas Day games and WWE's weekly show Raw. The NFL and a record-breaking boxing match between Mike Tyson and Jake Paul helped Netflix add 19 million subscribers in the fourth quarter - a new record for the company, surpassing even COVID-era highs - as the streaming giant further cemented its place as a leader.

Netflix co-CEO Ted Sarandos also highlighted the company's upcoming slate of content, including returning seasons of shows such as Wednesday, Stranger Things and Squid Game, as well as new films from Guillermo del Toro, Catherine Bigelow, Noah Baumbach, the Russo brothers and a new Knives Out film. On the live events front, Netflix also has the SAG Awards next month.

Netflix also announced that it added a record 19 million new subscribers in the fourth quarter, bringing its subscriber base to 302 million. Netflix reported revenues of $10.2 billion and operating income of $2.3 billion and a margin of 22.2 percent. Netflix co-CEO Greg Peters added that the company's pricing philosophy has not changed, and that he believes the pricing for the standard ad-supported plans is a 'very accessible entry point’.
Going forward, Wall Street will have to predict Netflix's subscriber growth on its own, as the company will no longer provide quarterly subscriber updates in order to focus on revenue and profit growth. The company will continue to provide subscriber numbers when certain milestones are reached.

The company said it expects Q1 2025 revenue of $10.4 billion and operating income of $2.9 billion. The company also raised its 2025 revenue guidance by $500 million to $43.5 billion-$44.5 billion. These numbers are sure to grow as Netflix also announced its first price increases in two years, including a price hike for its ad-supported tier. The company continues to grow its advertising business, although it is still not big enough to break even on its own.

However, Netflix co-CEO Greg Peters downplayed the role of live events in driving subscriber growth, telling analysts that 'We've seen broad strength across content categories in all regions. And we’ve seen that throughout the year, and as we've seen throughout our history, no single title really drives the majority of our acquisition or engagement’.
Netflix also announced that it will now release its bi-annual engagement report in conjunction with its Q2 and Q4 earnings (the report details what programming its users are watching), and that its board has authorized an additional $15 billion in share buybacks.

In comments on the earnings call, Netflix co-CEO Ted Sarandos said that the devastating fires that hit Los Angeles would not impact the company's cash spending or delay any projects, but that they had seriously affected the larger entertainment community, both above and below the line. 'This industry has been through a really tough couple of years, starting with COVID, going through the strikes and now this, so it's really important that we try not to delay anything and try to make sure those jobs stay safe', Sarandos said. And he dismissed any suggestion that Netflix's planned release of Greta Gerwig's 'Narnia' on Imax screens in 2026 was a sign of a wider shift in its film strategy.

In addition, Netflix's core strategy is to make exclusive films available to subscribers. The Narnia Imax premiere is a release tactic. They routinely release films in theaters a few weeks early to qualify for awards, to meet festival requirements and to prime the hype pump a bit. Greg Peters also highlighted Netflix's evolving video game strategy. They intend to focus on more narrative games based on the Netflix IP. They also plan to add party games and co-op games delivered from the cloud.

Netflix shares jumped to an all-time high of $999 in early trading on Wednesday. As of 9:33 a.m. ET, they were trading up 12.2 percent at $975.33. Netflix's fourth-quarter results beat guidance on all financial metrics, with a quarterly record of 19 million net members, nearly double the estimate.
Guggenheim analyst Michael Morris pointed out that Netflix's total addressable market of potential subscribers has expanded to over 750 million broadband households (excluding China/Russia), implying an international penetration of 35 percent compared to 66 percent (and growing) in the US. Netflix's audience engagement continues to strengthen, with domestic audience growth of approximately 16 percent in December and an all-time high US TV share of 8.5 percent.

For this year, Morris raised his subscriber growth forecast from 21 million to 25 million, with ad-based users accounting for 47 per cent, in line with 2024. Morgan Stanley analyst Benjamin Swinburne also reiterated a 'buy' rating on Netflix shares while raising his price target to $1,150, noting in a report titled 'Carry-On' that he also raised his estimates for the company 'following stronger-than-expected results and guidance'.

Netflix shows their constant activity and responses to the changing streaming market. As a leader, they are creating trends, new features and ways to reach viewers and subscribers, and the numbers show that their actions and decisions are working. Rivals need to watch what Netflix is doing and react accordingly. Slight price increases shouldn't be a problem, a dollar or two means almost nothing in today's world, but multiply that by millions of subscribers - that's a lot of profit.

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