Disney has raised its US streaming prices twice since 2024. The most recent hike, in October, added $2 per month to ad plans and $3 per month to ad-free plans. Netflix raised prices twice in the same stretch, most recently in March, by $1 per month on ads and $2 per month without.
Both companies now say they’re thinking about giving some of it away for nothing.
“Exploring a free product” is how Disney CEO Josh D’Amaro put it on a call with investors today, according to a transcript of the call. D’Amaro, who took over from Bob Iger in March, said a free Disney-owned streaming service would help the company reach more “price-sensitive” customers, which he called a “strategic priority” for Disney.
The ad math is the actual argument
Free doesn’t mean charitable. A free tier sells more ad inventory, and ad revenue matters more every quarter for services dealing with plateauing subscriber numbers, churn and competition from cheaper and free rivals.
D’Amaro made the inventory point directly. “Unlike a lot of our AVOD [advertising video on demand] competitors, we’re fairly well-sold, meaning more inventory would actually help us accelerate our ad revenue growth,” he said.
That’s a more specific claim than it sounds. Being well-sold means Disney isn’t sitting on unsold ad slots, so handing advertisers a new pool of free-tier viewers isn’t dilution, it’s supply for demand that already exists. Plenty of AVOD competitors can’t say that.
The second argument is funnel management. “A free offering could help us drive top-of-funnel Disney+ subscriber growth,” D’Amaro said, using the marketing term for the earliest stage of customer acquisition, where the point is awareness. “Nothing specific to announce today, but definitely something that we’re considering.”
Nobody will say what it looks like
Disney executives didn’t describe the shape of a free product. No catalog, no country list, no date.
A Business Insider report last month said the company was “discussing making some content accessible on Disney+ without a paywall, according to two people familiar with the matter.” The same report said Adam Smith, chief product and technology officer at Disney, brought up free streaming content at a company meeting for streaming employees but “didn’t share a timeline for this initiative or a sense of the scope.”
So: an idea with two internal mentions and zero commitments. Worth watching, not worth planning your subscriptions around.
Netflix is more hesitant, and more honest about why
Netflix co-CEO Greg Peters walked through the problem in more detail on a call with investors last month, and the caveats are the interesting part.
“A free offering could make sense in some markets, but we have to be thoughtful about cannibalization of paid tiers,” Peters said. “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.”
Read that carefully and it’s a list of conditions, not a plan. Some markets. Enough differentiation that paying customers don’t downgrade. An ad business already at scale in whatever country goes first. And then the flat line at the end: no near-term plans.
Free TV already won a big chunk of the living room
The demand these companies would be chasing is measurable, and it isn’t small.
Forty-six percent of US Internet households regularly use FAST (free ad supported streaming television) services like The Roku Channel and Pluto TV to watch long-form video, according to a Q3 2025 Parks Associates survey of 8,009 US households.
A Q4 2025 survey of 4,493 people 18 and older in the US and Canada found 54 percent using ad-supported subscription tiers, with AVOD/FAST adoption at 70 percent, up five percentage points year over year.
Five points in a year is the number that should worry a pricing committee. That’s not a niche holding steady, that’s a habit spreading while subscription bills go up.
The size of what’s at stake
Disney+ counted 131.6 million subscribers as of November. Netflix reported over 325 million as of January. They’re two of the largest streaming services by subscriber count, and that customer base has absorbed repeated price increases over the years.
A free tier is also a differentiation play. Disney+ sits alongside Netflix and HBO Max as a subscription video-on-demand service, and customer frustration with constantly rising prices is the one thing all three share. Being the first of that group to offer something free would be a real distinction, at least until the others copy it.
Which brings you to the part worth remembering the next time your bill goes up. Disney and Netflix spent years training viewers to expect on-demand video without the cable package, then raised prices until a serious share of the audience went looking for free alternatives. Now they’re considering building those alternatives themselves. If you’re waiting to see whether a free Disney+ tier is coming, the useful signal isn’t the next earnings call. It’s whether either company names a country.
