Netflix has confirmed that it won’t offer a subscription that will serve ads to paying subscribers this year. The company indicated that it has delayed the deployment of the ad-supported subscription tier.
Netflix's Co-CEO Ted Sarandos had recently confirmed that the streaming giant was indeed planning to launch an ad-supported subscription tier. He did not indicate when the company would offer the subscription. Nonetheless, a leaked internal Netflix communications memo seemed to imply that the new, lower-priced subscription would arrive before the end of 2022.
Netflix has confirmed that the company will not be offering an ad-subsidized subscription tier in 2022. In its latest quarterly report, the company indicated it may deploy the new tier at the beginning of next year.
We recently announced Microsoft as our technology and sales partner and we’re targeting to launch this tier around the early part of 2023. They are investing heavily to expand their multi-billion advertising business into premium television video, and we are thrilled to be working with such a strong global partner.
The report follows the announcement that Netflix partnered with Microsoft to serve advertisements on the platform. Moreover, the statement clearly implies that Microsoft is keenly interested in expanding in the lucrative and massively popular world of online streaming.
Microsoft has an expansive AdTech platform. The company’s products are already deeply entrenched in multiple web platforms. However, with nearly 221 million global paid subscribers, Netflix is the biggest streaming service around the world. Partnering with such a company will obviously provide a huge opportunity for Microsoft to grow its ad business.
Even though its rivals have long offered ad-supported tiers, it is apparent that Netflix is not rushing to deploy yet another subscription plan. Instead, the company could be focusing on its growth, increasing revenue from each subscriber, and minimizing password sharing. In the past, Netflix has vehemently denied it would consider serving ads.