Disney and Paramount are testing free tiers for their streaming platforms to compete with YouTube and FAST services for advertising budgets. The share of free streaming platforms—YouTube, Tubi, and The Roku Channel—grew from 17.2% to 19.1% on American televisions over the year, according to Nielsen data from May 2024. Subscription services risk losing audience if they don't offer a legal way to try content without paying.
Why paid platforms are considering a freemium model
Subscription fatigue is forcing viewers to cut back on paid services. Free ad-supported tiers help attract new audiences and convert them to paying subscribers while simultaneously monetizing through advertisers. Disney is discussing opening up part of Disney+ content to general access so viewers can get familiar with the interface and want to pay for the full catalog.
Paramount+ plans to launch a feature the company internally calls a "free front porch." This is a third-quarter priority alongside microdramas and podcast clips. The goal is to win back departed users and build a habit of watching content in the app. This model works like a funnel: free access to older seasons or individual episodes raises awareness of new releases and drives subscription purchases.
Netflix remains cautious. Co-founder and co-CEO Greg Peters stated that a free tier "could make sense in some markets," but the company has no plans in the near term. The reason is the risk of cannibalization: if some paying subscribers switch to a free plan, subscription losses must be offset by advertising revenue. Netflix has already built a large base in the US, so any free content could give users reason to cancel their paid subscription.
Risks for platforms and advertisers
The main danger is devaluing the premium image. When content becomes freely available, brand perception shifts: viewers start seeing it as something not worth paying for. Analyst Paolo Pescatore from PP Foresight warns that overly generous free offerings undermine the subscription model, while too limited offerings fail to retain attention.
If all platforms offer free tiers, the streaming advertising market will face an oversupply of inventory—CPM rates will drop, and placement effectiveness will become unpredictable
For brands, mass transition of streaming services to ad-supported models means growing inventory, but not necessarily higher quality reach. John Conca, analyst at Third Bridge, points out: if Disney, Paramount, and others simultaneously launch free tiers, the market will be flooded with ad slots. CPM rates will fall, competition for attention will intensify, and measuring actual conversion will become harder—audiences will scatter across dozens of platforms.
Brands will need to choose placements more carefully: it's important to understand which content the platform offers for free and how engaged that audience is. If a user only watches old seasons with no intention of buying a subscription, their value to an advertiser is lower than that of an active paying viewer.
What's happening in the Russian streaming market
In Russia, the situation is developing differently. Subscription video services—Kinopoisk, Okko, START, Premier—already compete with free platforms like YouTube and Rutube. The freemium model for video content is nothing new: many services offer a limited free catalog with ads to attract users and showcase the benefits of a paid subscription.
For Russian brands, the growth of free streaming tiers opens new media buying opportunities. You can reach audiences who aren't ready to pay for a subscription but actively consume content. The key difference from the Western market is lower fragmentation: we don't have dozens of major streaming services, so competition for advertising budgets is between two or three players and video hosting platforms.
When planning ads on streaming platforms, it's important to account for ad labeling requirements: any branded placement must include a label indicating its advertising nature. This applies to both pre-rolls and content integrations.
How a brand should evaluate advertising effectiveness on free streaming tiers
To avoid wasting budget on ineffective reach, a marketer needs a clear plan for testing hypotheses:
- Request platform data on average viewing time on the free tier—if users watch less than 10 minutes per session, engagement is low and the value of an impression drops.
- Compare CPM on free and paid tiers—the difference should reflect audience quality, not just size.
- Check targeting capabilities: if the platform only sells broad reach without segmentation by interests or demographics, effectiveness will be lower than targeted social media ads.
- Measure not just impressions, but actions: website clicks, app installs, brand search queries after the campaign—this shows real impact on conversion.
- Test with small budgets: launch a pilot campaign on one platform, collect stats over two weeks, and scale only with confirmed ROI.
If a platform doesn't provide transparent analytics for the free tier—that's a warning sign. Without audience behavior data, it's impossible to assess reach quality and predict results.
Frequently asked questions
How does free streaming differ from YouTube
Free streaming tiers offer professional licensed content—series, films, shows from major studios. YouTube is built on user-generated content and creators, though it also includes official brand and media channels. For an advertiser, the difference is in context of placement and audience type: on streaming, viewers are in a long-form viewing mindset, on YouTube they watch short videos and switch channels frequently.
Is it profitable for brands to advertise on free streaming platforms
It's profitable if the platform offers targeting and analytics, and the audience matches your target. Free tiers attract users unwilling to pay but actively consuming content—this can be valuable reach for mass-market products. For premium brands, context and engagement matter more than just audience size.
How to check the quality of a free streaming tier audience before buying ads
Request demographic data, average viewing time, app usage frequency, and active user share from the platform. Compare CPM and CPV with paid tier metrics and competitors. Run a pilot campaign with conversion and Brand Lift measurement to assess real business impact, not just reach.
In brief
- The share of free streaming services on the American market grew to 19.1% over the year—paid platforms are losing audience.
- Disney and Paramount are testing freemium models to attract viewers and convert them to paying subscribers through an ad funnel.
- Netflix is cautious due to cannibalization risk: free content could give paying users reason to cancel subscriptions.
- Mass launch of free tiers will create oversupply of ad inventory and lower CPM, complicating effectiveness forecasting for brands.
- Russian marketers must verify the quality of free tier audiences: viewing time, targeting, analytics transparency—without this, media buying becomes blind reach.
- Measure not just impressions but conversions: clicks, installs, search queries after campaigns show real business impact.
If you're planning digital media and streaming placements, ETC will help you select channels with maximum audience reach and forecast campaign performance considering current market shifts.
