Netflix experimenting with free original content to lure subscribers

Netflix is fast approaching 200 million subscribers worldwide, with over 70 million from North America. The pandemic has certainly accelerated viewers’ content consumption, or as The New York Times put it back in April, “Everyone you know just signed up for Netflix.” According to Netflix’s Q2 2020 financial statements, the company enjoyed an increase of almost 3 million subscribers from April through June of this year, as compared to its first net loss of subscribers a year ago in Q2 2019.

The leading streaming service is not starving for customers, but leaders can’t rest on their laurels. In an effort to attract new subscribers, especially as new entrants like Disney Plus, Apple TV+ and HBO Max put increasing pressure on Netflix, the company recently decided to offer a slice of its original programming for free. Movies like Oscar-nominated Two Popes and thriller Bird Box are watchable without a subscription or sign up, as are the first episodes of many series, including the blockbuster Stranger Things franchise.

Netflix has offered some of its documentaries for free via YouTube in the past, but the service has never opened the doors to its content as a marketing vehicle quite like this. “We’re looking at different marketing promotions to attract new members and give them a great Netflix experience,” a spokesperson commented to Gadgets360.

“At a certain point, it becomes more difficult for Netflix to gain subscribers in the US, simply because so many people have it already,” said Brett Sappington, VP at Interpret. “The incremental cost of acquiring the few that don’t currently have Netflix becomes significant. Netflix’s use of free original content promotes one of its greatest strengths, leverages a sunk cost, and allows the greatest flexibility in use since Netflix owns the content rights.”

For a service that has always been ad-free and subscription-based, moving content outside of the pay wall is no small feat. The new free-content feature includes a scrolling interface promoting the free content (currently ten shows/movies) and a pre-roll ad promoting Netflix content. The free content is available globally but must be viewed either via a PC web browser or an Android device rather than a TV. That shouldn’t be a problem for streaming audiences used to watching content across a variety of devices.

In fact, according to Interpret’s New Media Measure® the smartphone and the TV are neck-and-neck as top devices on which to consume Netflix content, and the PC isn’t far behind at 25%. Additionally, almost a third of Netflix subscribers see themselves one day unplugging their TVs and watching exclusively via other internet-enabled devices. We’re living in a portable entertainment world.

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