Netflix is offering content for free in the hopes of enticing new subscribers

• Netflix is running a global test to offer some of its content for free.
• The move  comes as the streaming giant tries to acquire more members while also pulling back on marketing spend.
• Insider Intelligence analyzes this industry and several others to provide in-depth analyst reports, proprietary forecasts, customizable charts, and more. Learn more about what we offer.

Netflix is offering first episodes of some original shows and select full-length movies for free to nonsubscribers, per TechCrunch.

This move comes as the streaming giant tries to acquire more members in Q3 2020 while also pulling back on marketing spend. Each video features a skippable 30-second pre-roll ad showing other content in the Netflix catalog, but it’s important to note that the platform has so far kept its promise of ad-free content for subscribers.

Netflix saw significant Q2 2020 user growth because of stay-at-home orders and is likely trying to sustain that momentum. The company added 10.1 million worldwide subscribers in Q2, a 27.3% year-over-year (YoY) increase. Per our latest estimates published in February, Netflix will have 158.9 million US viewers by the end of the year, up from 154.4 million last year.

The company said in its Q2 earnings call that Q3 subscriber additions will be lower than those in Q2, so this move is likely an attempt to pad those numbers. It should be noted that these free episodes are available to everyone only on web browsers. On mobile, Android users will have access to the content, but iOS users will not, per Netflix.

Netflix has also cut back significantly on marketing spend, so this serves as a lower-cost marketing ploy as it avoids larger ad campaigns. The company outlined a leaner marketing strategy in its Q2 2020 earnings call, with co-CEO Ted Sarandos saying the company would be working on a “more efficient, more impactful and more global way to talk to [its] members,” which is not “always through the most traditional channels.”

In Q2, the company had already cut marketing spend (as a proportion of revenues) by 28% YoY, per AdExchanger, and moving into H2, there was no indication that that would be reversed. Making some of Netflix’s biggest titles available for free should play well into the company’s plans.

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