Streaming giant Netflix has chosen Microsoft as its partner for its first ad-supported subscription plan. Netflix has selected Microsoft as its global advertising technology and sales partner. The streaming major's first ad-supported plan is said to be rolling out in the fourth quarter of this year.
"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," Greg Peters, Chief Operating Officer and Chief Product Officer, said in a statement.
"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."
Earlier last month, reports said that Netflix is in talks with Comcast’s NBCUniversal and Alphabet's Google to work with it and create ad-supported plans. The reports surfaced amid the streaming giant developing a strategy to boost revenue through ads.
"This is a big day for Netflix and Microsoft. We’re excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers," said Mikhail Parakhin, President Web Experiences, Microsoft.
Previous reports also suggested that the streaming giant was also negotiating with entertainment firms to put ads into shows that it does not create itself. Licensing movies and TV shows for both ad-free and ad-supported streaming will cost Netflix about 20 per cent more than for streaming without ads alone, said a report by The Information.
To recall, Netflix for the first time in May announced that it would be introducing cheaper ad-supported plans in the fourth quarter (Q4) of 2022. The company has told its employees that it intends to introduce an ad-supported plan by the end of this year and this comes quicker than what was previously indicated.
Netflix's announcement of introducing ad-supported tiers came along with minimising password sharing. It is likely that Netflix starts putting a ban on password sharing among its subscribers around the same time it rolls out ad-supported plans.
The company had hinted at the possible changes after registering a loss in subscribers earlier this year. The platform saw a loss in subscribers for the first time in a decade. It cited factors such as sluggish economic growth, inflation and geopolitical events such as the Russia-Ukraine war for the loss of subscribers.
The streaming giant had announced that it ended the first quarter of this year with 221.6 million subscribers and the APAC region, which includes India which added 1.09 million paid members in the region.