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Netflix, Microsoft Team Up for Cheaper Plan with Adverts

Collins Ogutu | 1 year ago
Netflix, Microsoft team up for cheaper plan with adverts
Netflix, Microsoft team up for cheaper plan with adverts

Netflix has teamed up with Microsoft to offer a cheaper subscription plan to customers that will show adverts.

The streaming giant says the service will be an "addition" to its existing plans, which do not include adverts.

In April, shares in Netflix slumped after it reported its first subscriber loss in more than a decade.

Last month, co-chief executive decision Ted Sarandos said the company was in talks with other businesses to find ways to appeal to price-sensitive audiences.

The firm has not yet revealed how much it planned to charge customers for the new service.

On Thursday, Netflix said it had 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 said in a statement.

"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," he added.

Netflix never wanted ads. Its entire business model was built around monthly subscriptions.

Yet Netflix executives have had to rip up their own rules.

It comes after terrible figures showed that the company was losing subscribers.

And the cost of living crisis has meant that households, tightening their belts, have looked at their Netflix subscription as a potential saving. 

Mikhail Parakhin, the president for 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," he said.

In April, 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.

Last month, the firm announced 300 job cuts as it grappled with the drop in customer numbers.

Also last month, Mr Sarandos said Netflix was in talks with several companies to explore advertising partnerships.

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