Netflix teamed with Microsoft to develop an advertisement-supported proposition for its streaming service, as the company attempts to mitigate slowing subscriber growth and offer cheaper tiers in the face of tougher competition.
Details of the partnership came after Netflix CEO Reed Hastings indicated in April it would introduce a lower-priced subscription plan in addition to its ad-free basic, standard and premium offerings.
The move is designed to grab more subscribers following a period of slowing growth, after Netflix missed its own estimates in Q1.
Hastings had previously been staunchly against advertising, stating he wanted the service to allow viewers to relax without being exploited.
Netflix will use Microsoft to help it build-up “more options” to access its content, it stated, and all adverts served on the platform will be on an exclusive basis.
In its statement, Netflix COO Greg Peters said Microsoft was chosen after proving its ability to “support all our advertising needs”.
“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.”
Major rival Disney+ has also announced plans to launch an ad-supported tier.Subscribe to our daily newsletter Back