Video streaming giant Netflix has gained dominance yet again after the company added 18.9 million subscribers during the holiday, bringing its total global subscriber base to nearly 302 million. Capitalizing on its popularity, Netflix is also set to raise prices across major plans in the US, Canada, Portugal, and Argentina.
Following a mixture of live sporting events, popular returning series like Squid Game, and singular moments, such as Beyonce’s football halftime performance, Netflix attracted a record number of subscribers over the festive period.
The company explained that its fourth-quarter programming slate surpassed its expectations as it generated large viewers on the second season of its survival thriller “Squid Game”. The dystopian Korean horror tale about a fictional, deadly game remains the most-watched Netflix TV series ever.
“Squid Game”, an ultra-violent tale exploring themes of division and inequality, is considered to be one of the most significant works in solidifying South Korea’s status as a global cultural powerhouse, alongside the Oscar-winning film “Parasite” and K-pop megastars BTS.
In the final quarter of 2024, Netflix recorded a profit of $1.87 billion on revenue of $10.25 billion, growing double digits from the same period the prior year. Its shares jumped more than 10 per cent to $960.60 in after-market trades.
“We enter 2025 with strong momentum, coming off a year with record net additions – 41 million- and having re-accelerated growth. We have to continue to improve all aspects of Netflix – more series and films our members love, a great product experience, increased sophistication in our plans and pricing strategy including more advertising capabilities – and grow into new areas like live programming and games,” Netflix executives said in a letter to shareholders.
Events such as the heavyweight boxing match between Jake Paul and Mike Tyson in November attracted 65 million streams. Also, the two National Football League games on Christmas Day, one featuring Beyonce’s halftime performance, brought in an average of 30 million global viewers, ranking among the most-streamed competitions in league history.
“To state the obvious, it’s content that drives users to streaming services. With the biggest bump in subscribers ever, Netflix’s attention to quality content is the reason for an overall strong year and fourth quarter,” said Forrester Research Director Mike Proulx.
Price increase
Netflix looks to build on its impressive performance as the video streaming platform is increasing its ad-supported tier from $6.99 to $7.99 per month, while the standard ad-free tier will go from $15.49 to $17.99 per month.
Additionally, its highest-priced premium tier is also increasing from $22.99 to $24.99 per month. According to Netflix spokesperson, MoMo Zhou, the price hikes will go into effect during subscribers’ next billing cycle.
“Netflix reaffirms its leadership position and is absolutely running away in the streaming market. It is now flexing its muscles by adjusting prices given its far stronger and diversified programming slate compared to rivals,” said Paolo Pescatore of PP Foresight.
This is the first time since October 2023 that Netflix will raise the price of its subscription and its ad-supported plan which it rolled out in 2022. “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’s letter to investors says.
The video streaming platform’s stock surged about 13 per cent in extended trading following an optimistic reaction from its investors. It also lifted its stock market value by almost $50 billion. In 2024, the streaming giant shares have gained more than 77 per cent, outpacing the projected 24 per cent rise.
Also Read: Netflix acquires 5.1 million subscribers in Q3 2024, targets more in Q4.
Netflix’s 2025 forecast
Disclosing its 2025 goals, the company said it has moved past COVID-19 and the 2023 Hollywood writers’ and actors’ strikes effect. It is now set to return seasons of its most popular shows, including the Addams Family series “Wednesday,” and the supernatural “Stranger Things.”
It also promises to broadcast more live events such as weekly instalments of WWE “Monday Night Raw” wrestling. It also secured the rights to stream the FIFA Women’s World Cup in 2027 and 2031.
Growing its ad business is a top priority for this year. “We exceeded our ads revenue target in the fourth quarter. We doubled our ads revenue year over year last year. We expect to double it again this year,” said Co-CEO, Greg Peters. Experts have predicted that its ad revenue will increase to $2 billion this year.
The company also revised its guidance, projecting revenue of $43.5 billion to $44.5 billion in 2025, an increase of half a billion dollars compared to the 2024 forecast. The updated guidance reflects improved business fundamentals, the company said.
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