Netflix closed 2024 with an impressive quarter, adding 19 million net subscribers and reaching 302 million global memberships. This growth contributed to a 16% year-over-year revenue increase, reaching $10.25 billion in Q4. Despite economic headwinds, including a strengthening U.S. dollar, the company maintained its trajectory with strategic pricing and an expanded content portfolio.
Ad-supported tiers emerged as a critical driver of Netflix’s growth. The company’s ad revenue doubled in 2024 and is projected to double again in 2025. Co-CEO Greg Peters noted that over 55% of Q4 sign-ups in ad-supported regions came from these lower-cost plans, with ad membership increasing nearly 30% quarter over quarter
Peters added, “We listen to signals like engagement, retention, and acquisition to determine when we’ve achieved value increases for members.”
Netflix also implemented targeted price increases across key markets, including the U.S., Canada, and parts of EMEA. The standard ad-supported plan’s entry price of $7.99 in the U.S. underscores its value proposition.
Pricing Details: Netflix raised prices across various tiers:
- Standard Plan (Ads): $7.99 in the U.S., up from $6.99.
- Standard Plan (No Ads): Increased to $15.49 in the U.S., reflecting enhanced value.
- Premium Plan: Adjusted to $22.99 in key markets, including the U.S. and Canada.
Ted Sarandos, Co-CEO, highlighted the importance of “having the goods” to justify price adjustments, citing a robust 2025 content lineup with returning hits like Stranger Things and Squid Game.
A Focus on Engagement and Content Strategy
Content diversity and engagement remain central to Netflix’s success. Live programming milestones in Q4 included the Jake Paul vs. Mike Tyson fight, which became the most-streamed sporting event ever, and NFL games on Christmas Day, drawing unprecedented viewership.
On the gaming front, Squid Game: Unleashed debuted as the #1 free game on Apple’s App Store in 107 countries. Netflix plans to expand gaming with narrative-driven titles and cloud-based games, reinforcing its strategy of deepening engagement.
Ad tech innovation is another area of focus. With its first-party ad platform launch in Canada, Netflix aims to enhance advertiser capabilities and improve monetization. The U.S. rollout is planned for April 2025, positioning the company to capitalize further on connected TV ad spending
INSIDER TAKE:
Netflix’s Q4 performance offers critical insights for subscription businesses:
- Engagement Drives Retention: Netflix’s ability to retain subscribers across diverse offerings highlights the importance of a balanced content slate that appeals to varied audiences.
- Ad-Supported Growth: Netflix’s success with its ad tiers demonstrates the potential of flexible pricing strategies to attract cost-conscious consumers while unlocking new revenue streams.
- Strategic Pricing Adjustments: Netflix’s measured approach to price increases ensures alignment with value delivery, a crucial consideration for long-term retention.
- Live and Event Programming: Netflix differentiates itself in a crowded streaming market by focusing on high-impact, can’t-miss events rather than traditional sports packages,
For subscription leaders, Netflix’s success underscores the value of innovation and strategic adaptability in navigating a dynamic market. With continued investments in ad tech, gaming, and live programming, the streaming giant exemplifies how to build a sustainable subscription model with broad appeal.