Netflix and Microsoft sign deal for ad-based subscription plan

Netflix and Microsoft have signed an agreement to provide cheaper subscription plan which comes with advert, as Netflix restrategises after losing 200,000 subscribers.

Netflix reported that 200,000 subscribers cancelled their subscription plan with the streamer in Q1 2022. This brought a heavy loss to the company and resulted in investors dumping their shares on the exchange floor.

Since Netflix started offering subscribers streaming options, it had never advertized on its different packages, but that ad-free era is gradually coming to an end.

Netflix hinted at the new direction 3 months ago and the partnership with Microsoft has revealed that the company is advancing into a new era where subscribers will be forced to watch ads, in an effort to increase Netflix’s revenue sources.

In a statement posted on Microsoft website, Netflix did not reveal when the ad-supported subscription plan would commence. However, Netflix Chief Operating Officer, Greg Peters, said there would be “TV brand experience for advertisers” and “we are pleased to announce that we have selected Microsoft as our global advertising technology and sales partner.”

Peters said: “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.”

The statement read: “Microsoft has the proven ability to support all our advertising needs as we together 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.”