Netflix partners with Microsoft as streamer plans to launch new ad-supported subscription plan

(Netflix Photo)

As Netflix looks to launch an ad-supported subscription tier to its streaming television service, the company is partnering with Microsoft as its technology and sales partner.

The companies announced the deal on Wednesday. Mikhail Parakhin, president of Web Experiences for Microsoft, said in a blog post that the Redmond, Wash.-based tech giant is “excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers.”

Netflix, home to such hit shows as “Stranger Things,” first announced in April that it was considering a lower-priced subscription plan that was supported by advertising. The streamer admitted that it had lost 200,000 subscribers in the first three months of 2022 and was looking for ways to lure customers back with pricing options.

Netflix CEO Reed Hastings has long said advertising would never come to Netflix. His tune changed in April.

“Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription,” Hastings previously said on a Netflix earnings call. “But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want makes a lot of sense.”

Netflix COO Greg Peters said Wednesday that Microsoft has the proven ability to support Netflix’s advertising needs.

“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,” Peters said. “It’s very early days and we have much to work through. But our long-term goal is clear: More choice for consumers and a premium, better-than-linear TV brand experience for advertisers.”

The plan with ads would be in addition to existing ads-free basic, standard and premium plans.

See also  Barry Diller calls his Activision-Blizzard options trade in advance of blockbuster Microsoft deal a ‘lucky bet’

Microsoft CEO Satya Nadella also tweeted about the deal:

CNBC reported that Netflix has been interviewing potential partners, including Google and Comcast, for several months in preparation for launching the tier by the end of the year. Microsoft doesn’t operate a competing streaming service to Netflix, unlike Google, which owns YouTube, and Comcast, which owns NBCUniversal’s Peacock.

CNBC also called the new business a “boon” for Microsoft’s advertising division, which contributes 6% of the company’s total revenue.

The Wall Street Journal reported Tuesday that Netflix is seeking to amend its programming deals with major entertainment studios to allow it to put content on an ad-supported version of the service.

Studios likely will seek a premium of 15% to 30% over existing contracts to grant Netflix the right to put their content on an ad-supported platform, some entertainment executives told the Journal.

Hi, I'm Vikky Penn, currently working on msiu.info. This is my personal Blog, where I will share the tips and knowledge that I have learned. If you have any questions, please contact me at Email: [email protected]! Thank you !

Related Posts

EU approves Microsoft’s $19.7B Nuance deal, clearing last major hurdle for big acquisition

Microsoft Image The European Commission gave unconditional approval to Microsoft’s pending acquisition of speech technology company Nuance Communications for $19.7 billion in cash, clearing the way for…

Surface Trio? Newly discovered Microsoft patent filing shows hinged device with three displays

A diagram for three-screen device from a Microsoft patent filing. (U.S. Patent & Trademark Office) Microsoft has released two versions of its Surface Duo handheld device, each…

Paul Allen’s L.A. site sells for $65M, part of effort to scale back late Microsoft co-founder’s projects

Late Microsoft co-founder Paul Allen. (Vulcan Photograph) A 120-acre site bought by the late Microsoft co-founder Paul Allen for $20 million in 1997 within the Beverly Crest…

Microsoft’s Pluton security processor debuts on AMD chips in new Lenovo ThinkPad laptops

New ThinkPad Series Z laptops from Lenovo will include Microsoft’s Pluton security processors in an AMD CPU. (Lenovo Image) Lenovo unveiled two new laptops made out of…

‘Rainbow Six’ developer plans to bring Ubisoft+ subscription service to Xbox

Ubisoft’s forthcoming Rainbow Six: Extraction pits crack military operatives against invasive alien not-zombies. (Ubisoft Image) The third-party development studio behind the Assassin’s Creed and Tom Clancy video…

Tech in the wild: Seattle-area startup Thingy will test Amazon Sidewalk to connect remote sensors

Thingy AQ provides information to first responders in wildfires. (Thingy Photo via Amazon) Scott Waller is a former Cisco and Microsoft systems engineer and network architect who…

Leave a Reply

Your email address will not be published.