Streamers like Disney+ and HBO Max have a key problem with no clear solution

SOURCE:Business Insider|BY:James Faris

Media giants are trying to solve their engagement issues as free streamers like YouTube take viewers. John Wilson/Netflix Audiences have increasingly shifted toward free streaming services like YouTube this year. Paid streaming services have seen their viewership growth slow as they raise prices. Netflix and Disney are experimenting with creative ways to win viewers. Free streaming services are having success, and it may be coming at the expense of their paid peers. YouTube and other free ad-supported services, such as The Roku Channel and Fox-owned Tubi, have become increasingly popular over the last two years, according to Nielsen's viewership data. "For consumers, cost sensitivity is often a more important deciding factor than user experience," said Brandon Katz, a media analyst at entertainment data provider Greenlight Analytics. "Saving money outweighs the annoyance of terrible insurance commercials." As these free streamers eat up a larger chunk of viewership time on US smart TVs, they may be holding back the growth of services like Disney+, Hulu, and HBO Max. Free-to-access services YouTube, Tubi, and The Roku Channel have grown their viewership by 53% from December 2023 through November, according to a Business Insider analysis of Nielsen data. Those three free streamers make up nearly 18% of all watch time on US TVs, and that doesn't include Paramount's Pluto TV, which Nielsen broke out individually until March. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); In that span, major paid streamers' collective watch time is only up 5%. That includes Netflix, Amazon Prime Video, Disney+, Hulu, Peacock, and HBO Max, formerly known as Max. (Paramount+ was included until March, when Nielsen stopped reporting its individual share. And HBO Max's viewership includes sister streamer Discovery+.) window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); That means free streamers are growing more than 10 times faster than their paid counterparts, though the bulk of that growth is driven by YouTube, which has become a force in Hollywood. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Slower engagement growth is a troubling sign for paid streamers. Viewership is positively tied to pricing power and inversely correlated with cancellations, meaning that people who watch a streamer more often are less likely to cancel. "Engagement drives churn down," said Hernan Lopez, founder of media consulting firm Owl & Co. "It's not just about hours spent," he added, but also the frequency that viewers return to an app and the breadth of content that they watch. Engaged streaming subscribers are also usually more receptive to price hikes, Katz said, since they likely place a higher value on the service than inactive users. "The goal is to offer customers enough attractive content that opening the app becomes a regular occurrence," Katz said. "At that habitual usage point, streamers are able to reasonably raise prices without fear of a mass exodus of customers." For customers on ad-supported plans, higher engagement also translates to more ad revenue. It's not all bad news for paid streamers. Streaming is an increasingly profitable business, thanks in large part to price hikes, which every major service (except for Prime Video) has implemented or announced in the past 12 months. Disney+, Hulu, and HBO Max have also continued to add customers this year. However, Peacock hasn't grown its subscriber base since the first quarter of 2025, and Netflix no longer reports its subscriber count on a quarterly basis. The large gap between free and paid streamer viewership growth rates suggests that so-called stream-flation could be taking a toll. Media giants must walk a tightrope between pleasing Wall Street and pushing consumers toward free streamers, or apps like Instagram and TikTok. Streaming giants Netflix and Disney each have creative ideas for driving engagement in 2026. Netflix is turning to video podcasts in hopes of adding lean-back content that keeps subscribers engaged throughout the day. It's also been trying to use games as a way to create daily habits among its users. Disney is taking a different tack by betting on AI-generated video through a new partnership with OpenAI. This AI initiative will enable fans to create short clips of Disney characters, such as Mickey Mouse or Darth Vader, eventually within the Disney+ app. Read the original article on Business Insider

Knives Out Netflix — Media giants are trying to solve their engagement issues as free streamers like YouTube take viewers.
John Wilson/Netflix

Audiences have increasingly shifted toward free streaming services like YouTube this year.
Paid streaming services have seen their viewership growth slow as they raise prices.
Netflix and Disney are experimenting with creative ways to win viewers.

Free streaming services are having success, and it may be coming at the expense of their paid peers.

YouTube and other free ad-supported services, such as The Roku Channel and Fox-owned Tubi, have become increasingly popular over the last two years, according to Nielsen's viewership data.

"For consumers, cost sensitivity is often a more important deciding factor than user experience," said Brandon Katz, a media analyst at entertainment data provider Greenlight Analytics. "Saving money outweighs the annoyance of terrible insurance commercials."

As these free streamers eat up a larger chunk of viewership time on US smart TVs, they may be holding back the growth of services like Disney+, Hulu, and HBO Max.

Free-to-access services YouTube, Tubi, and The Roku Channel have grown their viewership by 53% from December 2023 through November, according to a Business Insider analysis of Nielsen data. Those three free streamers make up nearly 18% of all watch time on US TVs, and that doesn't include Paramount's Pluto TV, which Nielsen broke out individually until March.

In that span, major paid streamers' collective watch time is only up 5%. That includes Netflix, Amazon Prime Video, Disney+, Hulu, Peacock, and HBO Max, formerly known as Max. (Paramount+ was included until March, when Nielsen stopped reporting its individual share. And HBO Max's viewership includes sister streamer Discovery+.)

That means free streamers are growing more than 10 times faster than their paid counterparts, though the bulk of that growth is driven by YouTube, which has become a force in Hollywood.

Slower engagement growth is a troubling sign for paid streamers. Viewership is positively tied to pricing power and inversely correlated with cancellations, meaning that people who watch a streamer more often are less likely to cancel.

"Engagement drives churn down," said Hernan Lopez, founder of media consulting firm Owl & Co.

"It's not just about hours spent," he added, but also the frequency that viewers return to an app and the breadth of content that they watch.

Engaged streaming subscribers are also usually more receptive to price hikes, Katz said, since they likely place a higher value on the service than inactive users.

"The goal is to offer customers enough attractive content that opening the app becomes a regular occurrence," Katz said. "At that habitual usage point, streamers are able to reasonably raise prices without fear of a mass exodus of customers."

For customers on ad-supported plans, higher engagement also translates to more ad revenue.

It's not all bad news for paid streamers. Streaming is an increasingly profitable business, thanks in large part to price hikes, which every major service (except for Prime Video) has implemented or announced in the past 12 months.

Disney+, Hulu, and HBO Max have also continued to add customers this year. However, Peacock hasn't grown its subscriber base since the first quarter of 2025, and Netflix no longer reports its subscriber count on a quarterly basis.

The large gap between free and paid streamer viewership growth rates suggests that so-called stream-flation could be taking a toll. Media giants must walk a tightrope between pleasing Wall Street and pushing consumers toward free streamers, or apps like Instagram and TikTok.

Streaming giants Netflix and Disney each have creative ideas for driving engagement in 2026.

Netflix is turning to video podcasts in hopes of adding lean-back content that keeps subscribers engaged throughout the day. It's also been trying to use games as a way to create daily habits among its users.

Disney is taking a different tack by betting on AI-generated video through a new partnership with OpenAI. This AI initiative will enable fans to create short clips of Disney characters, such as Mickey Mouse or Darth Vader, eventually within the Disney+ app.

Read the original article on Business Insider

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Streamers like Disney+ and HBO Max have a key problem with no clear solution