What you need to know
- Netflix has partnered with Microsoft for the ad-supported tier.
- Microsoft will act as its global sales and advertising technology partner.
- The cheapest subscription plan is expected to be launched later this year.
Netflix certainly comes with its streaming competitors, such as Hulu and HBO Max, with an ad-supported tier, with Microsoft as its business partner. The service has teamed up with the software giant as its worldwide advertising technology and sales partner.
Microsoft will display ads on Netflix’s cheapest subscription category through its advertising system. Advertisers will also have access to the “Netflix Audience and Premium Connected TV Inventory”.
Greg Peters, Netflix chief operating officer and chief product officer, wrote in Blog post (Opens in a new tab). “Most importantly, Microsoft has provided the flexibility to innovate over time in both technology and sales, as well as strong privacy protections for our members.”
This is part of Netflix’s efforts to increase revenue in order to offset the loss of 200,000 subscribers in the first quarter of 2022. It is also considering cracking down on password sharing. Back in March, the service announced that it was considering charging an additional fee for members to share their password with other family members or friends. The beta feature has since been rolled out in Chile, Costa Rica, and Peru.
For the streaming platform, the partnership gives it access to Microsoft’s extensive network of advertising partners.
It’s also a win-win situation for Microsoft, as it provides an opportunity to attract more advertisers. However, it was not an easy win for the company. Netflix has reportedly sought deals with advertising titans like Google and Comcast before settling with the Redmond giant, according to The Wall Street Journal (Opens in a new tab) (Unpaid Subscription Ban System).
“This is a great day for Netflix and Microsoft,” said Mikhail Barakhin, Microsoft’s head of web experiences, in a blog post. (Opens in a new tab). “We’re excited to bring new premium value to our ecosystem of marketers and partners while helping Netflix provide more choices for its customers.”
Netflix is fighting the streaming war to gain more eyeballs on many of the best streaming devices and smart TVs. However, it remains to be seen if the next tier will convince users to sign up for a cheaper streaming experience cut off by ads.
While the announcement failed to reveal the upcoming tier launch, rumors suggest that Netflix will roll out the ad-supported plan later this year.