During a call yesterday following a Q2 report, Netflix co-CEOs Greg Peters and Ted Sarandos answered questions from journalists and analysts about the company’s financials and future plans. One question was whether Netflix plans to introduce a free tier.
Peters took the question, agreeing that a free tier could be a good move for the company in specific markets but said that Netflix has no immediate plans to add a free tier in any market. He cited “cannibalization” of the service’s paid subscription tiers as one consideration as leadership weighs whether it makes sense to get into free streaming.
“It’s probably also worth noting that having an effective scaled ads business in any candidate country for such an offering is clearly an important enabling factor to make those economics work, Peters said. “So that’s all to say that free is something that we’re going to continue to consider, but we have no near-term plans to launch something.”
Last week, The Wall Street Journal reported that Netflix was exploring ideas for expanding the service, including adding live genre-specific channels and getting into subscription bundles. The report also touched on Netflix’s plans to dive deeper into live sports, mentioning that the company could potentially bid on FIFA World Cup in 2030 and 2034 matches when the time comes. The discussions about the potential updates have reportedly revolved around viewer engagement, which has dropped among Netflix subscribers.
Netflix’s call also came just after reports that Disney+ is considering an ad-free tier. Free content is currently being described by sources as “exploratory” at the company and execs, like the leaders at Netflix, are considering all options for increasing viewing time and additional revenue streams.
With competition among streaming services at an all time high, Netflix has several options for drawing in new users and developing new features to keep current subscribers engaged. The company will need to adapt to changing viewing habits and streaming trends to continue being the leader in the space.