Disney and Netflix Weigh Free Tiers Amid Price Hike Backlash
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Streaming giants are considering free, ad-supported options as subscriber growth plateaus and consumers migrate toward FAST services.
Disney and Netflix are exploring the possibility of launching free streaming offerings to attract price-sensitive consumers, as Ars Technica first reported.
During an investor call, Disney CEO Josh D’Amaro confirmed the company is exploring a free product to reach more customers and accelerate ad revenue growth. D’Amaro noted that a free offering could serve as a "top-of-funnel" tool to drive Disney+ subscriptions. While no specific plans were announced, Business Insider previously reported that Disney's chief product and technology officer, Adam Smith, discussed making some content accessible without a paywall during a meeting with employees.
Netflix is also considering free products, though co-CEO Greg Peters told investors last month that the company must be cautious regarding the cannibalization of paid tiers. Peters noted that a scaled ads business in a specific country is a necessary factor for the economics of a free tier to function.
These considerations come as both companies face subscriber churn and frustration over repeated price increases. Ars Technica reports that Disney+ raised U.S. prices twice since 2024, including an October hike of up to $3 per month. Netflix also implemented two price increases, with the most recent occurring in March.
Consumer behavior is shifting toward free ad-supported streaming television (FAST) services like Pluto TV and The Roku Channel. Data from Parks Associates cited by Ars Technica shows that 46 percent of U.S. households with internet access regularly utilize FAST services. Additionally, a Q4 2025 survey found that AVOD/FAST adoption rose to 70 percent.