Netflix’s Free Service

Family watching Netflix

Netflix recently launched a new “Watch Free” content section that allows non-subscribers to immediately watch some of their most popular original movies and TV shows, without ever having to sign up for an account. But what’s the catch?

While the free content includes a few movies that viewers can watch in their entirety, only the first episodes of the TV shows are available to watch and is currently only available via desktop or Android devices as Apple iOS browsers are not currently supported. In addition, each of the titles available will also feature a skippable, 30-second pre-roll sizzle reel, highlighting a range of Netflix’s original programming while prompting viewers to sign up for an account at the end.

While Netflix is still, to this day, the clear leader in streaming services, boasting over 193 million paid subscribers at the end of Q2 2020, the streaming video space has become saturated over the years, with competition becoming more intense in just the last year with the launches of Disney+, NBCUniversal’s Peacock, and WarnerMedia’s HBO Max to name a few.

In addition, while content is still king, all platforms have also offered a promotional bundle or tiered-pricing structure in an effort to stay competitive and attract new subscribers such as with Hulu’s ad-supported and non-ad options, bundling options with Disney+ that includes ESPN+ and Hulu, and most recently, HBO Max announced a 20% discount offer for new and returning subscribers with a $12/month promotion for up to one year, down from $15/month.

So what does this move mean for both consumers and advertisers alike? Is this simply a marketing move to gain more subscribers in this ever increasing and competitive landscape? Or is this perhaps setting the foundation for an ad-supported opportunity for advertisers within Netflix, which has been known to previously provide consumers with an ad-free experience?

While Netflix remains the leader in the online video streaming space based on users, Hulu and Disney+ may have more staying power as their users are more engaged with their content, with 15% of users reporting to spend 5+ hours per day viewing, compared to 11% of users for Netflix. It is also no secret that account sharing is the norm across these platforms, with Netflix being the most shared platform with 54% of users claiming to share their Netflix account with at least one other person according to a recent GlobalWebIndex survey. In addition, only 16% of Americans subscribe to three or more streaming services. Given how saturated the space has become – with five new major streaming services launching just this year alone – someone is bound to get left behind, but the big question is, who?

Given this, there is certainly untapped potential for new subscriber growth here for Netflix and this may be a larger move towards long-term strategic success by enticing users with free access to original programming (content is still king after all) in hopes to build loyalty to these exclusives, all the while, cross-promoting all the exclusive original content available through Netflix with the pre-roll sizzles. Smart move Netflix. But will it work? Only time will tell.

 

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