Streamers are pondering if the best things in life really are free (with ads, of course).
What happened: Disney CEO Josh D’Amaro confirmed on the company’s quarterly earnings call that it’s exploring adding a free ad-supported tier to Disney+. The House of Mouse is the latest big name in streaming to consider making a shift to free offerings.
Last month, Netflix co-CEO Greg Peters said a free tier “could make sense in some markets” as a way to attract cost-conscious consumers and grow its ad inventory.
Likewise, Paramount+ is reportedly working on a product dubbed internally as the “free front porch" that would let U.S. viewers watch select movies and shows for free.
Why it matters: The streaming revolution challenged the necessity of ad-supported media — it looks like that challenge has failed. Not only do all the big streamers now have paid ad tiers, but they’re increasingly losing market share to YouTube and FAST streamers like Tubi.
The three top free streamers accounted for 18.7% of U.S. TV watch time in April — up from 12.7% in 2024 — with YouTube the single-most-watched streaming platform.
With streamers focusing on ads, live events, and bundle deals, the total reversion to traditional cable is almost complete (albeit this time with the addition of podcasts).
Our take: The key to this will be offering enough quality content that people actually engage, without making it so attractive that paid subscribers trade down. Here’s the programming mix we would offer: new-ish movies that underperformed (giving them a second chance at hitting); the first season of hit shows (to get folks hooked); and older movies that used to be on TV all the time but are now locked behind paywalls (think The Fugitive, or Twister).—QH
