Netflix does not currently have plans to launch its own free, ad-supported streaming service, but also isn’t ruling it out.
Speaking on the earnings call Thursday, Netflix co-CEO Greg Peters said “a free offering could make sense in some markets,” given the streamer’s strategy of offering multiple price tiers and its goal of increasing engagement on the platform. However, he noted that this is not something that is currently in the works.
“A free offering could make sense in some markets, but we have to be thoughtful about cannibalization of paid tiers. We’ve got to ensure that we’ve got the right offering, the right differentiation of that offering. 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. 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,” Peters said.
“Maintaining and increasing accessibility, especially as we expand our content offering around the world, add new customer segments. That’s a critical focus and goal for us. Also, optimizing long-term revenue is the other big goal,” he said.
The question comes after a Wall Street Journal report last week saying that Netflix executives were considering adding in live channels that continuously stream one program or certain genres, in an effort to boost viewer engagement.
Netflix beat profit expectations for its second quarter, but missed expectations on revenue. And going forward, Netflix is forecasting a slower revenue growth pace than it has seen in recent quarters. In turn, the streamer’s stock price hit a 52-week low Thursday.
Meanwhile, FAST services have been taking off. Tubi, owned by Fox, captured 2.3 percent of all TV viewing in the U.S. in April, while the Roku Channel captured 3 percent of all TV viewing that month (Netflix still tops the other streaming services with 7.8 percent but comes in below YouTube, which captured 13.4 percent). Fox also recently announced plans to acquire Roku, and with it, the Roku Channel, to bolster its own streaming ambitions.
