Netflix Weighs Live Channels, Bundles as Rivals Grow

Netflix is reportedly reconsidering some of the fundamentals of its streaming model as free, ad-supported competitors chip away at its share of U.S. TV viewing time.

What's happening

According to reports from The Verge and TechCrunch, Netflix is exploring several product changes:

Always-on channels that would stream specific shows and movies continuously, similar to a traditional TV channel.
Live, 24/7 channels available to subscribers.
Bundles that would package Netflix with other streaming services — Peacock has been mentioned as a potential partner.
Talks to acquire Letterboxd, the social platform for movie fans.

Netflix has also been diversifying its content mix, adding short-form video, video podcasts, and a gaming app for kids, along with videos from digital media brands like BuzzFeed and Condé Nast.

Separately, Disney's chief product and technology officer Adam Smith discussed the possibility of a free ad-supported tier for Disney+ during a Thursday town hall, which could let non-subscribers watch parts of its library for free.

Why now: the free-streaming squeeze

The moves come as free streaming services capture a growing share of U.S. TV watch time:

12.7% in April 2024
16.8% in April 2025
18.7% in April 2026

By comparison, Netflix's share of total TV viewing stood at 7.8% in April, per Nielsen. Services like Pluto TV and Tubi already run always-on, ad-supported models, while YouTube and Tubi continue to grow their share of consumer viewing time.

Netflix's ad-supported tier currently costs $8.99 per month after a recent price hike.

Engagement concerns behind the scenes

Netflix is reportedly seeing signs of falling engagement broadly, with a specific concern about second seasons of original shows losing significant viewership compared to their first seasons. The report notes no detail on which financial or engagement metrics are driving this concern specifically, nor a confirmed timeline for any of the proposed product changes.

How this compares to competitors

Netflix's potential moves would bring it in line with several existing industry practices:

Apple TV and Prime Video already offer bundles including other streaming services.
Apple TV+ and Paramount+ already let non-subscribers watch a few free episodes.
Pluto TV and Tubi already run free, always-on ad-supported channels.

Sources reviewed — The Verge and TechCrunch — describe consistent details on Netflix's plans, with no direct conflicts identified between them.

What's still unclear

No official confirmation from Netflix or Disney on any of these plans.
No timeline for when always-on channels or bundles might launch.
No clarity on how advertising revenue or subscriber pricing would shift under a live-channel or bundle model.
No detail on the terms or scope of a potential Netflix-Letterboxd deal.

Why founders should care

For early-stage founders in media, ad-tech, or content platforms, these signals are worth tracking even in their early, unconfirmed stage:

Hybrid subscription/ad models may be gaining ground. If Netflix moves toward live channels, it's plausible that live/linear-style programming — which typically doesn't allow skipping ads — could meaningfully boost ad revenue, a model worth watching for startups building ad infrastructure.
Free and ad-supported distribution may be where growth is concentrated. With free streamers' share of watch time rising three years running (12.7% → 16.8% → 18.7%), there's a reasonable chance this signals durable demand for niche or ad-supported content startups rather than a short-term blip.
Retention tooling could see rising demand. Netflix's stated concern about second-season drop-offs suggests streaming platforms may increasingly value analytics or retention tools — a potential opening for startups in that space, though the underlying metrics driving Netflix's concern remain undisclosed.
Community layers may be gaining strategic value. Netflix's reported interest in acquiring Letterboxd suggests large platforms may increasingly see social/community features as differentiators, which could inform how community-driven media startups position themselves.

As with any pre-confirmation reporting, founders should treat these as directional signals rather than certainties — none of the plans have been officially confirmed by Netflix or Disney.