Netflix doesn’t currently have plans to launch its own free, ad-supported streaming service, but additionally 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 accelerating engagement on the platform. Nevertheless, he noted that this is just not something that’s currently within the works.
“A free offering could make sense in some markets, but we’ve got to be thoughtful about cannibalization of paid tiers. We’ve got to be certain that we’ve got the appropriate offering, the appropriate differentiation of that offering. It’s probably also price noting that having an efficient scaled ads business in any candidate country for such an offering is clearly a very important enabling factor to make those economics work. In order that’s all to say that free is something that we’re going to proceed to contemplate, but we’ve got no near-term plans to launch something,” Peters said.
“Maintaining and increasing accessibility, especially as we expand our content offering all over the world, add recent customer segments. That’s a critical focus and goal for us. Also, optimizing long-term revenue is the opposite big goal,” he said.
The query comes after a Wall Street Journal report last week saying that Netflix executives were considering adding in live channels that constantly stream one program or certain genres, in an effort to spice up 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 within the U.S. in April, while the Roku Channel captured 3 percent of all TV viewing that month (Netflix still tops the opposite streaming services with 7.8 percent but is available in below YouTube, which captured 13.4 percent). Fox also recently announced plans to amass Roku, and with it, the Roku Channel, to bolster its own streaming ambitions.