Last month, 9to5Mac reported that Netflix was in talks with potential ad partners to not only build its ad-based subscription plan but its in-house ad network. Now, the streaming service company has chosen Microsoft, Apple’s old nemesis, to partner with.
As announced by Microsoft in a blog post, the company is “thrilled to be named Netflix’s technology and sales partner to help power their first ad-supported subscription offering.”
When it launches, consumers will have more options to access Netflix’s content. Microsoft explains that marketers looking for their advertising needs will have access to the streaming service audience and premium connected TV inventory.
As a disclaimer, Microsoft said it endorses an “approach to privacy, which is built on protecting customers’ information.”
Here’s the statement from Netflix’s chief operating officer, Greg Peters:
In April we announced that we will introduce a new lower priced ad-supported subscription plan for consumers, in addition to our existing ads-free basic, standard and premium plans. Today we are pleased to announce that we have selected Microsoft as our global advertising technology and sales partner.
Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering. 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.
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. We’re excited to work with Microsoft as we bring this new service to life.
Why Netflix is betting on an ad-support tier?
This announcement comes after a rare drop in subscriber numbers last quarter. With that, Netflix is accelerating its efforts to attract new users.
The streaming service is clearly still in the early stages of planning its lower-priced tier with ads, so we still don’t know much about it. As it stands today, the cheapest Netflix plan is $10 per month, while you’ll have to shell out $20 per month if you want 4K streaming. Netflix’s most recent round of price increases went into effect in March.
At the same time as it is planning an ad-supported tier, Netflix is also aiming to crack down on password sharing. The company also detailed its plans to charge more for sharing passwords in March, explaining that it was testing the ability to “easily and securely” share your password with people outside of the house, but at the cost of “paying a bit more.”
Would Apple advertise in this new plan?
While this could be a bit funny, it’s not clear what approach Netflix and Microsoft will take. For example, although cable and streaming services compete, viewers often see streaming services announce their products while watching a cable channel.
Apart from Apple TV+, Apple has a wide array of products that could benefit from being advertised for more users, such as AirPods with Spatial Audio – which Netflix now supports – or a large display iPhone so users can take advantage of the streaming service content on Apple devices.
Would you be willing to pay less for Netflix in this future ad-based plan? Share your thoughts in the comment section below
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