Despite years of resistance, back in April, Netflix announced it would launch an ad-supported tier after struggling to retain and add subscribers. Thus came the inevitable Netflix ads. This followed the streamer reporting a massive loss of 200,000 subscribers for the first time in a decade. They also predicted further losses in the future. In such a situation, rolling out a cheaper plan would most likely attract more subscribers. And that’s where Microsoft comes in.
On Wednesday, 13th of July, Netflix revealed Microsoft as its technology and sales partner. The streaming giant partnered with the tech giant for its ad-supported service. This means Microsoft will be the exclusive provider of all Netflix ads. The streamer’s Chief Operating Officer, Greg Peters, illustrated that the newer ad-supported plan will be “in addition to our existing ads-free basic, standard, and premium plans.”
According to Peters, Microsoft’s innovations and its impeccable privacy protections were the main reasons for the alliance. While the business plan is still at the inception stage, the COO expressed his excitement to work with the software company. He also shed some light on their vision for the future. He promised “more choice for consumers and a premium, better-than-linear TV brand experience for advertisers.”
Microsoft CEO Satya Nadella took to Twitter to give his two cents regarding the partnership.
We’re thrilled Netflix has selected Microsoft as its advertising technology and sales partner. We want publishers to have more long-term viable ad monetization platforms, so more people can access the content they love wherever they are. https://t.co/QmPszxJTOf
— Satya Nadella (@satyanadella) July 13, 2022
What does Netflix Ads mean for customers?
Mikhail Parakhin, President of Web Experience, Microsoft, released an official blog regarding the collaboration. He shared, “At launch, consumers will 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.”
Since 2015, Microsoft President Brad Smith has been a chair on Netflix’s board. Microsoft’s Bing search engine and LinkedIn, its business-oriented social network, generated $10 billion in ad revenue last year. NBCUniversal’s Peacock and Warner Brothers Discovery’s HBO Max are among the rivals to offer an ad-supported service. Perhaps Netflix’s hoping for the same turnaround in their revenue by jumping on the bandwagon.
Having said that, you will not have to endure the ads unless you choose the cheaper plan. Subscriptions for premium, standard, and basic plans will continue to operate normally. Existing plans won’t have any ads. So you can relax and continue your ad-free bliss and steam your favorite Netflix Originals.
Is this a solution for all of Netflix’s underlying issues? Only time will tell. We hope that this new partnership proves fruitful for our beloved streaming giant. Now, if only Netflix could quickly fix its curation, the OTT would be a better place!