Microsoft to Help Launch Ad-Supported Netflix

Netflix, Microsoft, ad tier, subscription

Netflix has chosen Microsoft as its advertising technology and sales partner for the streaming service’s new lower-cost, ad-supported subscription plan.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Netflix said in a company blog post Wednesday (July 13). “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.”

Netflix added that the partnership is in its early stages, but said its long-term goal was to offer more choice for its viewers and a “better-than-linear TV brand experience for advertisers.”

The streaming service first announced the ad-supported version of its service following a disappointing earnings report in April. At the time, Netflix said it was down 200,000 subscribers for the first three months of the year, and projected it would lose around 2 million more this summer.

The company has said the losses were due to competition, along with inflation and the fact that it suspended services in Russia because of the country’s invasion of Ukraine — a move which cost Netflix 700,000 members.

Read more: Disney+, Netflix Look to Ads as Streaming Market Slows Down

“I have been against the complexity of advertising, and a big fan of the simplicity of subscription, but … I am a bigger fan of consumer choice,” CEO Reed Hastings said in April. “And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”

Related: Netflix Pushes Up Debut of Ad-Supported Tier to Year’s End

At the time, Hastings said the ad-supported Netflix was a year or two away. But in May, reports emerged that the company could introduce that new version by the end of this year in an effort to cut down on password sharing.