Adapted by:
Jose García
WriterTech journalist. Head of new formats at Xataka and TikTok presenter. I specialize in consumer tech and video games.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
Why do on-demand content platforms increase their prices year after year, even when users claim they’ll cancel their subscriptions? This seems unusual. In a different context, price hikes would typically lead to massive cancellations. However, Netflix appears largely unbothered.
Context. Despite the price increases and the wave of cancellations often discussed on social media, Netflix’s profit was $10.25 billion in the fourth quarter of 2024. This is a 16% increase from the same quarter in 2023 and the best results since 2021. So, were users really canceling their subscriptions in large numbers?
Interestingly, Netflix had expected just 9.8 million new U.S. subscribers during the fourth quarter of 2024, but 19 million ended up joining the streaming platform.
Users come back. According to data from consulting firm Antenna, price increases do lead to cancellations, but users often return. Netflix’s situation is especially interesting because the rate of returning users is higher than on other platforms.
Data. Antenna says that 50% of users who cancel their subscriptions resubscribe within six months. In addition, 61% of canceled subscribers return within a year. In other words, Netflix recovers six out of 10 cancellations after a year.
If users cancel due to a price increase, they typically return at the new higher price, which helps Netflix make up for the cancellations that weren’t reversed. Interestingly, many returning users choose a more affordable plan that includes ads. In fact, 55% of new subscribers select the ad-supported plan.
Netflix against the world. Data reveals that Netflix’s subscription win-back rate is much higher than that of other streaming services. Netflix recovers 50% of its users after six months, while the average recovery rate for other platforms is only 34%. Notably, Netflix recovers two out of 10 cancellations within just one month.
Limited growth. Netflix has consistently innovated its programming, expanding from TV shows and films to include sports and live events. With 300 million subscribers, the strategy has clearly been effective, but it isn’t perfect.
The company recognizes that continued growth will be challenging. “We will occasionally ask our members to pay a little more so that we can reinvest to further improve Netflix… [We’ll] continue to invest in programming and deliver more value for our members,” a Netflix spokesperson recently said. In other words, prices will keep increasing.
Netflix knows that attracting new subscribers won’t be easy moving forward, which likely explains the company’s decision to stop disclosing subscriber numbers. Instead, it’ll share data on audience metrics, views, profits, and growth, but users won’t know how many subscribers Netflix has. Subscriber figures will likely remain undisclosed until the streamer reaches milestones of 400 or 500 million, which it can then leverage for publicity.
Image | Venti Views
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