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Would Netflix Ever Consider a Free Ad-Supported Version?

Ben Bowman

As vultures circle the Netflix campus, analysts and frustrated subscribers are screaming about what the service should do to get back to growth. Facing a subscriber slump, the company is now giving in and considering two things it has previously refused: an ad-supported tier and a crackdown on password sharing. But there’s a more aggressive path Netflix could pursue if it wanted to kickstart the growth engine again: a free ad-supported tier.

It seems extremely unlikely Netflix would go this route. Company leaders clearly believe Netflix offers a superior value, which is why it held out so long against an ad-supported tier. But if we’ve truly entered the all-services-are-equal phase of the streaming wars, the next battle might be the race to accumulate users at any cost.

We imagine the ad-supported Netflix will follow its competitors with one of two ad-insertion methods: a pre-roll ad only, or ads interspersed throughout a film or show. In the case of Hulu or Paramount+, movies arrive interrupted after the pre-roll, while TV shows have those natural ad-breaks sprinkled throughout.

But if Netflix wanted to pull free viewers into its ecosystem, the next likely step would be to segment the content even further. With almost a decade of original content under its belt, Netflix could comb its library for content that gets very little traction among its paid viewers, then offer that for free on an entry tier. Popular, expensive, or feature-length content could still live behind a paywall.

If a limited free Netflix existed, that could unlock value in content that is otherwise languishing outside the categorized carousel we encounter when we log on. Here are four potential ways to leverage that free service.

Highlight Canceled Shows

Netflix may have given up on “Sense8,” “Cowboy Bebop,” and “Jupiter’s Legacy,” and paying customers may not want to delve into a canceled series, but the streamer could still earn ad revenue by tossing them on a free platform.

Spotlight Underseen Gems

A show like “Unbelievable” didn’t get the popular love it deserved. There must be plenty of critically acclaimed shows and movies that didn’t break through the clutter. Netflix could use a free service to promote the great stuff missed by the masses. A limited spotlight carousel could draw further attention to these shows and films. And if an army of free viewers starts raving about a show on social media, it might help paying subscribers discover it for themselves.

Content discovery is a huge problem with so much content, so Netflix could build word of mouth by catering to folks outside their premium subscriber base.

Offer the First Season Free

With popular, long-running content Netflix could offer up the first season of something like “Stranger Things” for free, but put subsequent seasons on the paid tiers. Peacock does a version of this with its historically popular sitcoms like “The Office” and “Parks and Recreation.”

Rotate the Library

There is so much content on Netflix, it’s hard to separate the gold from the fool’s gold. If a free Netflix existed, the company could keep the library limited to 50 films and 100 series, rotating it each month to keep viewers engaged. If the audience gets upset that a show or film is taken off, they can always pay up for a premium tier.

Netflix’s Nuclear Option

There is an even more outrageous plan Netflix could pursue. If it didn’t want to create its own free service for fear of damaging its brand, it could partner with a major free player like Pluto TV or Tubi. That would expose its content to a new audience, generate ad revenue, and hopefully pull subscribers to the paid subscription side. We know Pluto TV has 64 million monthly active users, so that’s a big potential audience.

Netflix has been such a forward-thinking company, so its efforts are almost always on what’s next. But for a company creating so much original content, they’re doing a poor job of monetizing older shows. Aside from very limited syndication deals for “Fuller House” or “One Day at a Time,” all that Netflix content is stuck behind the Netflix paywall.

Longtime subscribers have either seen Netflix’s older shows or they don’t care to dig them up, so it’s up to Netflix if they would like to monetize that content or let it sit and gather dust. Would a brand new subscriber in 2022 seek out “Orange is the New Black”? Or would a show like that be the perfect vehicle to onboard a new user to the Netflix family if given away for free?

Again, these possibilities seem unlikely in the short term. Netflix will milk the ad-supported model for all it’s worth. But when its next growth plateau emerges in a few years, don’t be surprised if the free model enters the conversation.


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