Netflix to partner with Microsoft on a new ad-supported subscription plan

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Netflix to partner with Microsoft on a new ad-supported subscription plan
(Image Courtesy: Netflix)

Netflix, a giant streaming service today (July 14, 2022) announced that it has selected Microsoft as its global advertising technology and sales partner for its upcoming ad-supported subscription plan.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering. More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members,” Netflix Chief Operating Officer and Chief Product Officer Greg Peters said in a statement.

Back in April 2022, Netflix already disclosed its intention to launch a new lower-cost ad-supported plan. This will be in addition to its existing ad-free tiers.

The decision was made in April 2022, just as the service reported its first quarterly subscriber decrease in more than ten years. For the first time since 2011, Netflix reported a loss in subscribers during the first quarter of 2022, losing 200,000 subscribers.

The company also estimated losing an additional 2 million users in the following three months. The company had 221.64 million members as of March 31, 2022.

The company first said that it will experiment with an ad-supported service “over the next year or two,” but it has now speeded up this deployment and intends to launch it by the end of this year.

“We are adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.’” At the Cannes Lions advertising conference this month, Netflix co-CEO Ted Sarandos said to noted tech reporter Kara Swisher that up until this point, they had “left a big customer segment off the table.”

Marketers will have access to the Netflix audience and premium connected television inventory, according to Mikhail Parakhin, President-Web Experiences at Microsoft, who stated in a blog post that advertising run on Netflix will only be made available through the Microsoft platform.

“We want publishers to have more long-term viable ad monetization platforms, so more people can access the content they love wherever they are,” Microsoft CEO Satya Nadella said on his Twitter feed.

Microsoft claimed more than $10 billion in advertising revenue the previous year, and this month it successfully acquired Xandr, a programmatic advertising marketplace, from AT&T.

A number of Netflix’s competitors in India, including Disney+ Hotstar, Zee5, Voot, and MX Player, all provide a subscription to users that is ad-supported. In India, Amazon offers a streaming service called miniTV that is sponsored by advertisements.