Netflix has approached Microsoft to help develop a new subscription tier that will contain ads. The streaming giant announced that Microsoft will become its “global advertising technology and sales partner”.
The brief announcement states Microsoft demonstrated its ability to support Netflix’s advertising needs. Additionally, the company “offered the flexibility to innovate over time on both the technology and sales side”. This strongly suggests Microsoft and Netflix have been working on a customized AdTech platform for the streaming giant. It is quite possible that Netflix required an all-in-one solution, and Microsoft agreed.
Microsoft too announced the development, and in a blog post, reiterated its commitment to respecting user privacy.
We’re thrilled Netflix has selected Microsoft as its advertising technology and sales partner. We want publishers to have more long-term viable ad monetization platforms, so more people can access the content they love wherever they are. https://t.co/QmPszxJTOf— Satya Nadella (@satyanadella) July 13, 2022
Netflix COO Greg Peters has claimed the company wanted to offer “more choice” to its customers, along with a “better-than-linear TV brand experience for advertisers”. The company has time and again repeated that it won’t insert ads in any of the existing subscription tiers. And Netflix has stayed true to its promise.
A subscription tier with ads will be an entirely new offering. None of the existing packages will have ads. Moreover, the new subscription will be cheaper. Incidentally, the cheapest Netflix subscription currently available in the US costs $9.99. It is not clear if Netflix will price the new ad-supported subscription below $10.
As reported by The Verge, Microsoft has previously worked with Netflix. In its early days, the streaming company had relied on Microsoft Silverlight for streaming movies through its “Watch Instantly” platform. It is not clear why Netflix avoided Adobe Flash Player, which was a very popular platform back then. Coincidentally, neither Adobe Flash nor Microsoft Silverlight are actively supported today.