Netflix Inc announced that they have selected Microsoft as their global advertising technology and sales partner for its new ad-supported subscription plans for its over 221 million subscribers. In April, Netflix had announced that they will introduce a new lower priced ad-supported subscription plan for users, in addition to their existing ads-free basic, standard, and premium plans. The streaming giant looks to push up decelerating subscriber growth by rolling out an economical subscription plan.
Mikhail Parakhin, President, Web Experiences of Microsoft said that consumers will have more options to access Netflix’s award-winning Connect at the launch of its offering. Marketers considering Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. All ads that are served on Netflix will be entirely available through the Microsoft platform. Microsoft’s approach to privacy is built on protecting customers’ information, Parakhin stated.
He further added that this was a big occasion for Netflix and Microsoft. He said that they are excited to offer their new premium value to the network of marketers and partners while helping Netflix deliver more choice to their customers.
The COO and Chief Product Officer of Netflix, Greg Peters, stated that Microsoft has the proven ability to support all their advertising needs as they work together to build a new ad-supported offering. More notably, Microsoft offers the flexibility to innovate over time on both the technology and sales line-up, as well as strong privacy protection for their members.
Peters further noted that the offering is in its early days, and there is much work to be done. The streaming giant’s long-term objective is clear. More preference is defined for consumers and a premium, exceptional-linear TV brand experience is apportioned for advertisers too. He added that they are excited to work with Microsoft as they bring this new service to fruition.
Microsoft is projected to power Netflix’s ad sales
The software giant grossed over USD 10 billion in ad revenue in 2021, selling ads on assorted services such as its Bing search engine and its business-focussed social network-LinkedIn. The previous month, Microsoft completed its acquisition of AT&T Inc’s online advertising platform Xandr Inc., which allows advertisers to buy ad space across multitude of websites and target audiences.
The announcement of the partnership comes in ahead of Netflix’s second quarter earnings report on Tuesday. The company notified investors that it could lose a great deal of two million subscribers in the period, despite the return of such popular series as Stranger Things, that broke viewer records.
Netflix joins several of its rivals in offering ad-supported service, including Walt Disney Company’s Hulu, NBCUniversal’s Peacock and Warner Brothers Discovery’s HBO Max. Disney also intends to launch a version of Disney+ with commercials.
The cross-platform measurement company, Comscore Inc. stated that such ad-supported subscription services are getting a more rapid rate of adoption than subscription services, as the rise in prices is squeezing consumers’ wallets.
The time is right for traditional subscription-based streaming services like Netflix to consider unveiling an ad-supported tier to enhance their growth trajectory, Comscore’s product leader James Muldrow said in a statement.