Netflix and Microsoft have partnered up to help fund a cheaper ad-supported tier for the streaming service.
Microsoft will become Netflix’s “global advertising technology and sales partner,” according to a Wednesday announcement. The company announced in April that it was considering an ad-supported tier to help increase its subscription count. Netflix announced the new tier option after reported losses in the first quarter of 2022.
“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Netflix COO Greg Peters wrote in a blog post. “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.”
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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
Microsoft affirmed the partnership. “This is a big day for Netflix and Microsoft,” wrote Mikhail Parakhin, Microsoft’s president of web experiences. “We’re excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers.”
The companies have not provided additional details about what their partnership entails.
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Netflix reported losing 2 million subscriptions in its first quarter, the first loss reported in a decade. This led to additional speculation that the company would consider creating an ad-supported tier like its competitors, a decision that the company confirmed in June. The company has been interviewing potential partners, including Google and Comcast, for the last few months as it prepares to launch the new tier.
The company is also exploring livestreaming and additional actions to stop password-sharing. It also decided to lay off hundreds of workers on June 23, as it struggles to compete with other streaming services, including HBO Max, Disney+, and Peacock.
