Netflix to Launch Ad-Supported Tier with Microsoft
25 August 2022 |
Display, Video, Audio
Netflix announced earlier this year that it would be introducing a new lower-priced ad-supported subscription plan for consumers. The company has now confirmed that they have selected Microsoft as their global advertising technology and sales partner.
Netflix lost nearly another million subscribers during the second quarter of 2022, but it hopes the launch of a new ad-supported streaming tier in partnership with Microsoft early next year can help to boost growth. The ad-supported tier will provide cost relief to ad-tolerant users while also attracting new, price-conscious users who have been reluctant to pay a premium price point.
Marketers looking to Microsoft for their advertising needs will have access to Netflix’s audience and premium connected TV inventory. All ads served on Netflix will be exclusively available through the Microsoft platform. Netflix recently identified that Microsoft’s technical capacity, its ability to innovate over time as well as its strong privacy protection for members were key factors behind the company’s selection of alternative platforms. Furthermore, Microsoft doesn’t have a video service of its own that competes with Netflix.
The rollout of the new ad-supported tier will be gradual, with the launch starting in a handful of key markets where advertising spending is significant. While it’s still unclear as to the shows and films the ad-supported tier will include, Netflix co-CEO Ted Sarandos confirmed that the library of the ad-supported tier will be different to that of other tiers. In other words, it will be missing some shows and films. Bloomberg also recently reported that Netflix doesn’t plan to run ads during original movies or on kids’ programs.
The company is still finalizing plans for its advertising-supported service, which means details and strategies could still change. However, the new ad-supported tier has the long-term goal of more choice for consumers and a premium brand experience for advertisers. This Netflix launch with Microsoft will definitely be something big to look forward to!
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