Netflix Explores 24/7 Live Channels: The Streaming Giant Embraces a New Linear TV Model

Netflix's Strategic Pivot: From On-Demand to Live

According to multiple reports, streaming giant Netflix is considering launching "always-on" live channels that would provide subscribers with round-the-clock, 24-hour streams of content. This move signals that Netflix may be breaking away from the pure video-on-demand (VOD) model it has long championed, returning to the "linear broadcasting" experience of traditional television.

Linear Broadcasting is the core technical paradigm of traditional television: content is aired sequentially according to a predetermined schedule, all viewers watch the same content at the same moment, and viewers cannot control playback—they can only "tune in" for specific programs. VOD (Video on Demand), by contrast, completely upended this logic—users can access any content in the library at any time and at any speed. These two paradigms rest on fundamentally different infrastructure architectures and user behavior models, and consequently have given rise to entirely different monetization paths. When Netflix transitioned from its DVD-by-mail business to online streaming in 2007, it was precisely the revolutionary experience of the VOD model that allowed it to defeat the cable TV giants of the era. Now, it is beginning to draw lessons from the "old world" of linear broadcasting—a "full circle" moment that itself carries significant industry implications.

This strategic shift has a clear backdrop: Netflix is facing pressure from slowing growth in user engagement. As subscriber numbers hit a growth ceiling, the question of how to increase stickiness and usage time among existing users has become a central challenge the platform urgently needs to solve. "Always-on" live channels target precisely this pain point.

Why Is Netflix Building "Linear TV"?

Cracking "Choice Paralysis" and Lowering Decision Costs

The streaming on-demand model grants users tremendous freedom, but it also brings the famous "paradox of choice"—faced with a vast content library, users often spend a great deal of time browsing yet struggle to decide what to watch.

The "Paradox of Choice" was systematically articulated by American psychologist Barry Schwartz in his 2004 book of the same name. Its core thesis is that the more options there are, the higher the decision cost, and paradoxically, the lower user satisfaction. In the streaming context, Netflix has a content library of over 17,000 hours, and users spend an average of 18 minutes each time they open the app before deciding what to watch—a period the industry calls "discovery friction." Netflix's own data shows that if users cannot find content that interests them within 90 seconds, more than 70% will close the app. This phenomenon has directly driven the continuous iteration of Netflix's algorithmic recommendation engine—Netflix invests hundreds of millions of dollars annually in personalized recommendation algorithm R&D. Its recommendation system combines mechanisms such as Collaborative Filtering, context-aware models, and Multi-Armed Bandit approaches, and is estimated to save Netflix roughly $1 billion in churn losses each year. Live channels represent an alternative solution: bypassing choice entirely by replacing individual decision-making with curated content streams.

The "turn it on and watch" experience of traditional TV dramatically reduces the decision-making burden. By launching live channels, Netflix is essentially enabling users to "jump in anytime without picking," naturally extending viewing time.

Confronting the Reality of Slowing Engagement

This strategic consideration is a proactive response made "amid signs of slowing engagement." For Netflix, whose core is a subscription model, user viewing time directly affects retention and renewal willingness. Notably, the streaming industry typically uses the DAU/MAU ratio (daily active users to monthly active users) and Average View Hours per Subscriber as core engagement metrics—Netflix has disclosed in earnings reports that its global users cumulatively watch over 160 million hours per day, but the growth rate of this figure has clearly slowed in recent years. A 24/7 Netflix live channel means the platform can provide "background companion" content consumption scenarios at any time—a user habit that the pure VOD model struggles to cover, and one especially suited to the light-engagement behavior of "leaving the TV on without paying close attention" while doing chores, eating, or resting.

The Business Logic Behind Netflix's Live Channels

The Ideal Vehicle for Ad Monetization

Netflix has in recent years launched a lower-priced, ad-supported subscription tier. Netflix's Ad-Supported Plan officially launched in November 2022, priced at around $6.99/month (below the standard plan's roughly $15.49), trading a lower entry point for user acceptance of ads. As of early 2024, Netflix's ad-supported plan had surpassed 23 million subscribers. However, compared to YouTube or traditional TV, Netflix's Ad Inventory remains limited—because in the on-demand model, viewing behavior is fragmented, making it difficult to establish a stable concept of prime time.

The introduction of linear live channels will fundamentally change this landscape: fixed broadcast slots mean predictable ratings, and advertisers can purchase according to the traditional TV logic of CPM (Cost Per Mille, cost per thousand impressions). CPM is the advertising industry's core metric for measuring the cost to reach every 1,000 audience members; traditional prime-time TV ad CPMs typically range from $20 to $40, while programmatic digital ad CPMs are often lower but more precisely targeted. Linear live channels can help Netflix rebuild the concept of "prime time," attracting brand advertisers accustomed to traditional media buying logic and greatly lowering the barrier to direct sales beyond Programmatic Advertising. "Always-on" channels provide Netflix's ad business with more standardized, easier-to-sell ad slots, which could become a new revenue growth engine.

Competing with Traditional TV for Viewing Time

As cable TV subscribers continue to defect (with the cord-cutting trend accelerating), if Netflix can provide a continuous playback experience similar to TV channels, it can further erode traditional TV's viewing time and ad budgets. According to eMarketer data, the number of U.S. cable TV subscribers has continuously declined from a peak of about 100 million households in 2012, and is expected to fall below 50 million by 2025, while the time U.S. adults spend on traditional TV each day has shrunk from about 4 hours to less than 2.5 hours over the same period. This structural migration provides enormous market space for Netflix's live strategy, but it also means Netflix will directly enter a vMVPD (Virtual Multichannel Video Programming Distributor) market already occupied by mature competitors like Hulu Live and YouTube TV. A vMVPD is a "virtual cable TV" business model that has emerged in recent years, offering bundled services of multiple live TV channels over the internet. Platforms such as Hulu Live TV, YouTube TV, and Sling TV have already accumulated millions of paying users, typically charging $50–75 per month—if Netflix launches live channels, how it differentiates on pricing and content will be a key test.

This is in fact another move in the "TV-ification" process of streaming platforms, aligned with the thinking behind the FAST (Free Ad-Supported Streaming TV) channels launched by platforms like YouTube and Roku. FAST is one of the fastest-growing streaming segments in recent years—platforms like Pluto TV, Tubi, and Peacock channels have all built scaled FAST channel matrices. According to Omdia data, the number of FAST channels globally exceeded 1,500 in 2023, with ad revenue projected to surpass $12 billion by 2027. The core logic of the FAST model is to repackage a platform's existing content library into linear channels, creating new ad inventory at extremely low marginal cost—for platforms whose content libraries already exist and whose infrastructure is largely in place, the marginal operating cost of each new FAST channel may be just tens of thousands of dollars, while the ad revenue each channel brings can grow linearly with user scale. If Netflix launches a similar product, leveraging its original content licensing advantages, it could in theory build more differentiated paid live channels rather than simply replicating the free FAST model.

Industry Trend: The Content Consumption "Full Circle" of Streaming

This development reflects an intriguing "full circle" phenomenon in the streaming industry. Streaming once disrupted traditional linear TV with the on-demand model of "watch anytime, anywhere, whatever you want"; now, leading platforms are beginning to re-embrace the linear live format.

This is not a regression, but an inevitable result of the diversification of content consumption scenarios. From the perspective of media consumption psychology, user interaction with on-screen content can be divided into two distinctly different cognitive states: Lean-Forward Viewing and Lean-Back Viewing. During lean-forward viewing, users are highly focused, actively searching, selecting, and controlling content—this is the natural fit for the VOD model. During lean-back viewing, users are in a relaxed state, inclined to accept a content stream that is "fed" to them—this is precisely the psychological foundation on which linear TV has long occupied the living room screen. The early success of streaming platforms was built almost entirely on optimizing lean-forward scenarios, while lean-back scenarios—those moments when a tired user turns on the TV without knowing what they want to watch—have always been streaming's experiential weak spot relative to traditional TV.

• Lean-Forward Scenarios: Users clearly know what they want to watch; the on-demand model offers the best experience.
• Lean-Back Companion Scenarios: Users just want "something to watch"; linear channels better fit the need.

Netflix is attempting to satisfy these two distinctly different consumption psychologies simultaneously through live channels, thereby maximizing the platform's overall usage time and building a more complete content consumption loop.

Challenges and Uncertainties

At present, the relevant plans remain at the "reportedly considering" stage, and Netflix has not yet officially confirmed them. From a technical and content operations perspective, running a 24-hour uninterrupted Netflix live channel places higher demands on content scheduling, rights management, and real-time infrastructure.

The technical challenges of operating live channels should not be underestimated. VOD relies on file-level cached distribution via CDN (Content Delivery Network), while live linear streams require Live Encoding, low-latency transport protocols (such as CMAF/DASH-LL or HLS), and globalized real-time signaling systems. Specifically, in VOD scenarios, content files can be encoded in advance and cached on CDN nodes closest to the user, delivered directly upon request; live scenarios require encoders to process video streams in real time and distribute them to global users within seconds, and any delay or interruption in any link directly affects the viewing experience. Netflix's current technical foundation is built on AWS cloud services, and its proprietary Open Connect content delivery network—a network of proprietary caching servers Netflix deploys at major ISPs and IXPs (Internet Exchange Points) worldwide—is optimized specifically for large-scale VOD. Transitioning to live requires systematic architectural upgrades, including introducing dedicated live encoding farms, real-time streaming orchestration layers, and live-oriented monitoring and alerting systems.

Even more critical is the issue of rights clearance—many pieces of content have streaming licenses that cover only on-demand scenarios, and linear broadcasting requires renegotiating license terms, which is often the most costly and time-consuming stage. The difference in licensing between streaming and linear broadcasting is rooted in the different legal frameworks of Broadcast Rights and Performance Rights: in on-demand scenarios, each playback is treated as an "on-demand transmission," while linear broadcasting more closely resembles traditional broadcasting behavior, involving renegotiation across multiple dimensions such as music rights (requiring additional performance royalties paid to rights organizations like ASCAP and BMI), sports broadcasting rights, and regional exclusivity agreements. Additionally, building the EPG (Electronic Program Guide) system and automating content scheduling are also hidden barriers to live operations—the EPG is not only the interface through which users browse the live schedule, but also a complex backend system connecting content metadata, broadcast schedules, ad insertion instructions, and personalized user recommendations; its development and maintenance costs far exceed those of VOD content catalog systems.

Moreover, whether live channels can truly reverse the trend of slowing engagement remains to be tested by the market. Whether users are willing to choose "TV-style" linear content over the vast on-demand library on Netflix is an open question worth watching. What is certain, however, is that amid white-hot streaming competition, Netflix is actively exploring new growth paths beyond the traditional on-demand model.

Conclusion: On-Demand and Live Are Not Mutually Exclusive

Netflix's contemplation of "always-on" live channels is an important signal of the streaming industry's evolution from "on-demand is king" toward a hybrid "on-demand + live" model. It is both a direct response to slowing user engagement and a strategic move to monetize advertising and compete for viewing time. From a broader perspective, this trend reveals a deeper pattern in the streaming industry's development: once a platform has accumulated user scale, a single product format will ultimately fail to satisfy diverse usage scenarios, and evolving toward "full-scenario coverage" is the common destiny of all leading content platforms. HBO Max, Disney+, and Amazon Prime Video are all exploring the fusion of live and on-demand in different ways—Netflix's move may be just another public signal of a collective industry-wide transformation. Whether or not it ultimately materializes, this development deserves close attention from the entire streaming industry—because it could redefine the very first thing we see when we "open Netflix."

Key Takeaways