It is no longer news that Netflix is going to offer an ad-supported tier. The streaming platform has now partnered with Microsoft as an ad partner.
After years of resistance, Netflix has bowed to pressure and will offer an ad-supported tier on its streaming platform. Microsoft will come on board as its global advertising technology and sales partner when the service rolls out.
COO of Netflix Greg Peters said, “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.”
Microsoft said the plan was to work with marketers that would bring ads to the service. According to Mikhail Parakhin, Microsoft’s president of web experiences, “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. All ads served on Netflix will be exclusively available through the Microsoft platform. Today’s announcement also endorses Microsoft’s approach to privacy, which is built on protecting customers’ information.”
Microsoft, however, is already working on displaying ads on free-to-play games on Xbox.
Netflix has not announced when the ad-supported tier will become available, but there are rumors it could be ready by the end of the year.
The streaming company revealed it had lost subscribers this year, the first time in a long time it would not record growth. However, it remains the largest streaming platform in terms of subscribers, with more than 222 million users globally.
Netflix has been searching for how to grow its revenue. Apart from the ad-supported tier, it has raised prices on its plans. To increase the number of paying accounts, Netflix is also clamping down on password sharing, which is common among its customers.
The streaming company also laid off some workers and contractors.
Netflix and Microsoft have collaborated in the past. When the former launched its Watch Instantly service, the technology relied on Microsoft’s Silverlight instead of the more popular Flash Player. Also, the Xbox 360 was the first console to have an HD Netflix streaming app.