Q. I am concerned that streamers are going to stop offering free trials, like Netflix just did. What are your thoughts? Do you think the free trial will soon be extinct? — Gary, Reston, Virginia.
Gary, as you note, Netflix this month quietly eliminated its free trial after offering one for years, either a 7-day trial or an even more generous 30-day freebie. The move follows Disney+’s decision last June to end free trials shortly before it premiered the film version of the Broadway hit, Hamilton.
Their major streaming rivals, Hulu, Amazon Prime, Peacock and HBO Max, are still offering free trials, but I suspect that won’t continue much longer. The business reasons why Netflix and Disney killed the free trial are too powerful to ignore any longer.
And what are they?
1. It’s Too Easy to Cheat
Savvy consumers have learned that you can use a streamer’s free trial offer multiple times by using different e-mail addresses, and VPNs (Virtual Private Network) to disguise your location. The honor system really doesn’t exist on the Internet, at least not for many people. Their thinking: Why subscribe when you can game the system anytime you want?
Netflix and Disney realize that they have been losing significant revenue due to free trial cheating, and password sharing. (Don’t expect password sharing to be tolerated much longer, either.) While it’s true that free trials encourage some people to actually subscribe, I’m guessing that Netflix and Disney have concluded that the pendulum has swung way too far to the dark side.
2. The streamers are under enormous financial pressure now.
You might say that using multiple e-mail addresses isn’t new so why crack down now?
For the first time, Netflix is facing serious pressure from several competitors, not just a few. In the last year, Disney (Disney+), AT&T (HBO Max) and Comcast (Peacock) have all launched national streaming services. With Disney also running Hulu and e-commerce giant Amazon behind Prime Video, Netflix needs every subscriber it can get. It no longer has the luxury to hope that a free trial will entice someone to sign up.
And with so many streaming options, it’s likely that more consumers will use free trials. Why not? You could get more than 10 weeks of free television by enrolling in the free trials of Hulu (30-day free trial), Peacock (7-day), HBO Max (7-day) and Amazon Prime (30-day), one after the other.
Every major streamer faces this same challenge. If you offer a free trial, the odds are good that an increasing number of consumers will use it to watch television without having to pay. And with both Netflix and Disney now eliminating the free trial, it’s more likely people will turn to the free trials of their rivals.
That’s why I think you will soon see other major streamers follow the lead of Netflix and Disney and kill the free trial.
Gary, hope that makes sense. Happy viewing, and stay safe!
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