Since 2024, Disney has pushed up the cost of its US streaming products on two separate occasions. October’s increase was the latest, tacking on $2 a month to the ad-supported plans and $3 a month to the ad-free ones. Netflix also went to the well twice over that period, its most recent move coming in March: an extra $1 a month for ads plans and $2 a month for the ones without.
Now both companies are floating the idea of handing part of the product over at no charge.
The phrase Disney CEO Josh D’Amaro used on today’s investor call, per a transcript of it, was “Exploring a free product.” D’Amaro, who succeeded Bob Iger in March, argued that a free streaming service owned by Disney would extend the company’s reach to more “price-sensitive” customers — something he described as a “strategic priority” for Disney.
The ad math is the actual argument
None of this is philanthropy. A free tier creates more ad inventory to sell, and advertising revenue carries more weight with every passing quarter for services facing flattening subscriber counts, churn, and rivals that cost less or nothing at all.
D’Amaro spelled the inventory logic out himself. “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.
The claim is sharper than it first appears. If Disney is well-sold, it has no glut of unsold slots sitting idle — so opening up a fresh pool of free-tier viewers to advertisers doesn’t dilute anything, it feeds demand that’s already there. Not many AVOD competitors are in that position.
Argument number two is about the funnel. “A free offering could help us drive top-of-funnel Disney+ subscriber growth,” D’Amaro said, reaching for the marketing shorthand for the earliest phase of customer acquisition, the one that’s really about awareness. “Nothing specific to announce today, but definitely something that we’re considering.”
Nobody will say what it looks like
What form such a free product might take went undescribed by Disney’s executives. There was no catalog, no list of countries, no date.
Last month, a Business Insider report said the company had been “discussing making some content accessible on Disney+ without a paywall, according to two people familiar with the matter.” According to that same report, Adam Smith, Disney’s chief product and technology officer, raised the subject of free streaming content during a company meeting for streaming staff but “didn’t share a timeline for this initiative or a sense of the scope.”
Which adds up to this: an idea that has surfaced internally twice and been committed to zero times. Keep an eye on it, but don’t rearrange your subscriptions over it.
Netflix is more hesitant, and more honest about why
On an investor call last month, Netflix co-CEO Greg Peters laid out the problem at greater length — and the caveats are where it gets interesting.
“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.”
Parse it slowly and what you have is a set of preconditions rather than a roadmap. Only certain markets. Enough differentiation to stop paying subscribers from trading down. An advertising operation already at scale in whichever country goes first. Then the blunt closing note: no near-term plans.
Free TV already won a big chunk of the living room
The appetite these companies would be going after can be measured, and it is not marginal.
A Q3 2025 Parks Associates survey of 8,009 US households found that 46 percent of US Internet households turn regularly to FAST (free ad supported streaming television) services such as The Roku Channel and Pluto TV for long-form video.
In a Q4 2025 survey covering 4,493 respondents aged 18 and over across the US and Canada, 54 percent were on ad-supported subscription tiers, while AVOD/FAST adoption stood at 70 percent — a rise of five percentage points year over year.
That five-point jump in twelve months is the figure a pricing committee should lose sleep over. It doesn’t describe a steady niche; it describes a behaviour spreading outward while subscription bills climb.
The size of what’s at stake
As of November, Disney+ had 131.6 million subscribers on its books. Netflix’s January figure was north of 325 million. By subscriber count they rank among the biggest streaming services anywhere, and that same audience has swallowed one price rise after another over the years.
There’s a differentiation angle to a free tier as well. Disney+ competes directly with Netflix and HBO Max in subscription video on demand, and the one experience uniting all three is customer irritation at prices that never stop climbing. Whichever of them offers something free first would stand genuinely apart — right up until the others follow suit.
All of which is worth holding onto the next time your bill climbs. Disney and Netflix spent years teaching audiences to expect on-demand video without a cable bundle, then kept raising prices until a meaningful slice of that audience went hunting for free options. Now they’re mulling whether to build those options in-house. If you’re watching for a free Disney+ tier, the signal that matters isn’t the next earnings call — it’s the moment either company puts a country’s name to it.