Netflix grew from about 247 million subscribers in Q3 2023 to 301.6 million at the end of 2024 by charging for password sharing, adding a cheaper ad-supported plan and raising prices regularly. From 2025 it stopped reporting subscriber numbers and points investors to revenue instead. Q3 2026 revenue was $12.87 billion, up 11.8%.
Key takeaways
- The 2023 password-sharing crackdown added subscribers instead of losing them: a record 18.9 million in Q4 2024 alone.
- The US Standard plan rose from $15.49 to $19.99 between January 2025 and March 2026, about 29%.
- The ad tier grew from 23 million monthly active users (April 2024) to more than 250 million monthly active viewers (May 2026).
- Netflix now reports revenue and engagement, not subscribers. Watch revenue per member, not member count.
"That will never work."
Netflix co-founder Marc Randolph heard it over and over when he pitched DVDs by mail. Even his wife had her doubts. (I know the feeling.)
The doubters were right, at first. It took no late fees, then an all-you-can-watch subscription, then streaming before Netflix found product/market fit. That's the story I told in Chapter 10 of The Subscription Playbook.
What Netflix did next is the bit I find more useful for most business owners. Between 2023 and 2026 it made three moves that almost every subscription adviser would have warned against.
Then it stopped telling anyone how many subscribers it had.
The numbers: 2023 to 2026
| When | Metric | Figure |
|---|---|---|
| Q3 2023 | Subscribers (after password crackdown began) | About 247 million (+8.8 million in the quarter) |
| Apr 2024 | Ad tier monthly active users | 23 million |
| Q4 2024 | Subscribers | 301.6 million (+18.9 million, a record) |
| Jan 2025 | US Standard / ads plan | $15.49 → $17.99 / $6.99 → $7.99 |
| Q1 2025 | Subscriber reporting | Stopped |
| May 2025 | Ad tier monthly active users | 94 million |
| Nov 2025 | Ad tier monthly active viewers (new metric) | 190 million |
| Mar 2026 | US ads / Standard / Premium | $8.99 / $19.99 / $26.99 |
| May 2026 | Ad tier monthly active viewers | More than 250 million |
| Q3 2026 | Quarterly revenue | $12.87 billion, up 11.8% |
What did Netflix do?
Move #1 – Charge the freeloaders (2023)
For years, Netflix tolerated password sharing. Then it made households pay to add people outside the home. In the US an extra member now costs $7.99 a month with ads, or $9.99 without.
The internet predicted a revolt. The results showed the opposite: nearly 8.8 million new subscribers in Q3 2023, and a record 18.9 million in Q4 2024.
Why? Because the people sharing passwords were already getting value. Netflix just gave them a fair way to pay for it.
Move #2 – Add a cheaper tier with a trade-off
Instead of discounting its main plan, Netflix launched a cheaper plan with ads. Customers who balked at the full price had somewhere to go that wasn't "cancel."
That's good-better-best pricing with the advertising pricing model bolted on the bottom. The ad tier went from 23 million monthly active users in April 2024 to more than 250 million monthly active viewers in May 2026 (Netflix changed the metric along the way, so the two numbers aren't strictly comparable).
Move #3 – Raise prices, regularly
The US Standard plan went from $15.49 to $17.99 in January 2025, then to $19.99 in March 2026. That's about 29% in 14 months. The ad plan rose from $6.99 to $8.99 over the same period.
Each rise came with a steady flow of new shows, live events and sport. The value kept moving, so the price could too.
What would a price rise do to your numbers?
Model the revenue impact of a price increase and the churn you could absorb before it stops paying, with the free Price Increase Simulator.
Why did it work?
It comes back to product/market fit and ongoing usage.
In Chapter 5 I used Netflix as the example of the "ongoing usage" moat factor. A huge library, plus recommendations that keep pushing you toward the next show, kept monthly churn at about 2.4% in Q1 2021 against roughly 7% for other premium video services.
When people use something every week, three things become possible:
- You can charge the people tagging along, because they'd miss it.
- You can add a cheaper tier without collapsing the main one, because most people want the full product.
- You can raise prices, because cancelling means losing something you use, not something you forgot you had.
That's pricing power. You earn it with usage. You can't fake it.
Where this doesn't work
If your customers use your service once a quarter, a Netflix-style crackdown or price rise will just remind them to cancel. Usage first, pricing power second. Check your own numbers with the churn calculator before you copy the playbook.
The weak spot is advertising. Netflix cut its 2026 ad-revenue forecast from about $3 billion to about $2.7 billion. Reach is easy to grow when the plan is cheap. Turning attention into ad revenue is a separate business, and a hard one.
What the book said in 2022
I used Netflix as a product/market fit story. Marc Randolph's quote said it best: "If there was a moment when Netflix stopped being a start-up and became a real company, it was then." Engagement shot up. Churn dropped like a stone.
I also joked that if Netflix ever moved to usage-based pricing, my binge habit would bankrupt me. (That one still holds.)
What's happened since
Netflix moved from proving product/market fit to cashing it in.
From Q1 2025 it stopped reporting subscriber numbers and now points investors to revenue and engagement. That's a big signal. With an ad tier, extra-member fees and different prices in every country, one subscriber is no longer one unit of value. Revenue per member matters more than member count.
Q3 2026 revenue was $12.87 billion, up 11.8%. For comparison, Disney+ took a similar path of price rises and less subscriber disclosure; see how Disney+ tripled its price.
What you can steal from Netflix
You don't need a $12 billion quarter to use these.
- Find your password sharers. Who gets value from you without paying? The partner who tags along to every class. The second office using one login. The family member who borrows the membership card. Offer them a fair add-on price instead of ignoring them or banning them.
- Add a cheaper tier with a trade-off. Off-peak only, fewer visits, self-serve instead of full service, or a sponsored version. Give price-sensitive customers somewhere to go that isn't the exit.
- Raise prices in small, regular steps. Tie each rise to something visibly new. My guide on how to raise prices without losing customers has the scripts.
- Track revenue per member, not member count. Use ARPU as your headline number. A smaller base paying more can be a healthier business.
Worked example: the add-on member
A pilates studio has 200 members at $180 a month. Say 40 of them regularly bring a partner on guest passes. Offering a $60-a-month "plus one" add-on, and getting half of those 40 to take it, adds 20 × $60 = $1,200 a month, or $14,400 a year, with no new marketing spend. (Illustrative numbers.)
Your next step
Write down three groups of people who get value from your business without paying full price. Pick the biggest group and design one fair add-on for them this month.
For more on the model behind Netflix, read about the unlimited content subscription model, see the current Netflix pricing teardown, or go back to the start of the story with product/market fit.
Frequently asked questions
How much does Netflix cost in 2026?
After the March 2026 rise, the US plans were $8.99 a month with ads, $19.99 for Standard and $26.99 for Premium, according to CNBC. Adding an extra member outside the household costs $7.99 a month with ads or $9.99 without, per the Netflix Help Center. Prices vary by country, so check Netflix's site for your market.
Did the Netflix password-sharing crackdown work?
By the numbers, yes. Netflix added nearly 8.8 million subscribers in Q3 2023, soon after the crackdown began, reaching about 247 million. It then added a record 18.9 million in Q4 2024 to end the year at 301.6 million. The feared mass cancellation didn't show up in the results.
Why did Netflix stop reporting subscriber numbers?
From Q1 2025 Netflix stopped reporting quarterly subscriber counts and now points investors to revenue and engagement. With an ad tier, extra-member fees and different prices by country, a subscriber is no longer one fixed unit of value. Revenue tells investors more about how the business is doing.
Is the Netflix ad tier successful?
It has grown fast in reach: 23 million monthly active users in April 2024, 94 million in May 2025, and more than 250 million monthly active viewers by May 2026, on a new metric. Revenue is the soft spot. Netflix cut its 2026 ad-revenue forecast from about $3 billion to about $2.7 billion.
What was Netflix's churn rate?
The Subscription Playbook cited a monthly churn rate of about 2.4% in Q1 2021, against about 7% for other premium video services. Netflix doesn't publish churn itself, so figures come from third-party panels. The company's argument is that a large library and strong recommendations keep people coming back.
Get both books free
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- WHYY/AP, Netflix Q3 2023 results (19 Oct 2023)
- Deadline, Netflix Q4 2024 results, 301.6M subscribers (Jan 2025)
- Variety, Netflix will stop reporting subscriber numbers starting in 2025 (2024)
- Reuters, Netflix ad tier 23M MAU (17 Apr 2024)
- The Desk, Netflix ad tier 94M (May 2025)
- Deadline, 190M monthly active viewers (Nov 2025)
- Variety, Netflix ad tier reaches 250 million viewers (May 2026)
- CNBC, Netflix raises prices across all streaming plans (26 Mar 2026)
- Netflix Help Center, plans and extra member pricing (accessed Oct 2026)
- CNBC, Netflix Q3 2026 results (20 Oct 2026)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.