Netflix chose Microsoft to help build an ad support layer in the future. Streaming giant said on wednesday.
In April, after announcing the loss of subscribers for the first time in 10 years in its first-quarter revenue report, Netflix unexpectedly announced that it would introduce a cheaper commercial service to increase subscriber numbers. did. At the time, Netflix co-CEO Reed Hastings said the company would look for a third party to help build a new tier. Netflix does not have a dedicated sales and advertising team and has vowed that commercials will not appear on its service for years.
Since its announcement, Netflix has been discussing potential partnerships with many companies, including NBCUniversal, Google, and The Trade Desk.
Netflix also told staff that it hopes to introduce an ad layer by the end of the year. The company will continue to maintain a more expensive commercial-free hierarchy for its subscribers.
“Microsoft has the solid ability to support all advertising needs when co-building new services to support advertising,” Netflix Chief Operating Officer Greg Peters said in a statement. I am. “More importantly, Microsoft has provided us with the flexibility to innovate over time, both in terms of technology and sales, and strong privacy protection for our members.”
It was an ugly few months for Netflix. The company has fired hundreds of staff and stock prices have plummeted. On Tuesday, the company won fewer Emmy nominations than its rival HBO, even though it did much more programming than its cable network and its streaming service, HBO Max. Netflix announced its second-quarter earnings next week, previously stating that it could lose an additional 2 million subscribers during the quarter.
Netflix executives want to attract cost-conscious subscribers by introducing a low-cost ad tier. By introducing cheaper services, some analysts warn that streaming services can cannibalize from the base of subscribers who pay more for non-commercial experiences.
“At launch, consumers will have more options to access Netflix’s award-winning content,” said Mikhail Parakhin, president of Microsoft’s web experience. “Marketers looking to Microsoft for advertising needs have access to Netflix’s audience and premium connected TV inventory.”
