Netflix has teamed up with Microsoft to offer a cheaper subscription plan to customers that will show adverts.
The streaming giant said the service will be an “addition” to its existing plans, which do not include adverts. In April 2022, shares in Netflix slumped after it reported its first subscriber loss in more than a decade.
Last month, (June 2022) the Co-chief Executive, Ted Sarandos, disclosed that the company is in talks with other businesses to find ways to appeal to price-sensitive audiences. However, the firm is yet to reveal how much it plans to charge customers for the new service.
On Thursday, July 14, 2022, Netflix announced that it has selected Microsoft as its global advertising technology and sales partner to introduce a “lower priced 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,” Netflix’s Chief Operating Officer, Greg Peters, noted in a statement. Peters added that “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”.
Mikhail Parakhin, the President of Web Experiences at Microsoft, said customers will soon have “more options to access Netflix’s award-winning content”.
“Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. All ads served on Netflix will be exclusively available through the Microsoft platform.”
Mikhail Parakhin,, President of Web Experiences at Microsoft
What is Netflix’s Plan?
Earlier on Tuesday, July 12, 2022, it was reported that Netflix is trying to renegotiate the deals it has with major entertainment firms so that it can show adverts as part of its service. The firm reportedly held discussions with Warner Bros., Universal and Sony Pictures Television. Warner Bros declined to comment on details of the discussion when approached by the media on Wednesday, July 13, 2022. Also, Universal and Sony did not immediately answer reporters’ requests to comment on the outcome of their meeting with Netflix.
In April 2022, Netflix’s shares slumped by more than a third after it revealed a sharp drop in subscribers and warned that millions more were set to quit the streaming service. The sell-off wiped more than $50bn off the company’s stock market value, with some experts warning that it would face a struggle to get back on track.
Last month June 2022, the firm announced 300 job cuts as it grappled with the drop in customer numbers. Last month (June 2022), Ted Sarandos, the Chief Executive Officer of Netflix, said the firm is in talks with several companies to explore advertising partnerships. “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’,” Mr. Sarandos told an audience at a conference in Cannes.
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