Disney explores free streaming tier to boost ad revenue

Disney is exploring a free streaming product, CEO Josh D’Amaro confirmed during an investor call on August 5, 2026. The move comes as the company seeks to attract more price-sensitive customers and boost advertising revenue. D’Amaro, who succeeded Bob Iger as Disney’s chief in March, said that reaching these customers is a “strategic priority” for Disney. A free offering would also help generate more ad inventory, which D’Amaro noted is limited compared to competitors. “Unlike a lot of our AVOD competitors, we’re fairly well-sold, meaning more inventory would actually help us accelerate our ad revenue growth,” he said. The free product could also drive top-of-funnel subscriber growth for Disney+, though no specific plans were announced. Disney executives did not detail what the free service would look like, but a Business Insider report last month claimed the company discussed making some content accessible on Disney+ without a paywall. Adam Smith, chief product and technology officer at Disney, reportedly mentioned free streaming content during a company meeting but gave no timeline or scope. Netflix is also cautiously considering a free streaming product. Co-CEO Greg Peters said during an investor call last month that a free offering could make sense in some markets, but the company must be thoughtful about cannibalization of paid tiers. “We have no near-term plans to launch something,” Peters added. Both Disney+ and Netflix have raised prices repeatedly, with Disney+ implementing two US price hikes since 2024, most recently in October, when ad plans increased by $2 per month and ad-free plans by $3 per month. Netflix also raised prices twice, with the latest increase in March adding $1 per month to ad plans and $2 per month to ad-free plans. These increases have fueled customer frustration and churn, driving interest in free alternatives. A Q3 2025 Parks Associates survey of 8,009 US households found that 46 percent regularly use FAST services like The Roku Channel and Pluto TV. A Q4 2025 survey of 4,493 people in the US and Canada showed 70 percent adoption of AVOD/FAST, up five percentage points year over year. As subscription costs rise, the companies that helped popularize paid streaming are now considering free models to retain viewers and grow ad revenue.