Netflix has chosen Microsoft to help build a new, cheaper, ad-supported version of Netflix.
The streaming giant hopes that by launched an ad-supported option, it can slow the decline in subscribers as households seek to cut costs.
In an update, Netflix said the move to launch an ad-supported option was still in its “very early days”.
When it does eventually launch, consumers will have more options to access Netflix’s award-winning content. As part of the deal, marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. All ads served on Netflix will be exclusively available through the Microsoft platform.
Greg Peters, Netflix’s Chief Operating Officer commented:
“Today we are pleased to announce that we have selected Microsoft as our global advertising technology and sales partner. Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering. 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.”
The ad-supported plan will sit alongside existing basic, standard and premium subscription plans. It’s expected to launch in the USA first, before being rolled out internationally.
Netflix has seen subscriber numbers stagnate after the lockdown boom fizzled out. With households increasingly squeezed by inflationary pressures, streamers have struggled to convince viewers to add yet another subscription service.
Instead many viewers are choosing to chop and change each month or ditch certain streaming services altogether. Disney and others are attempting to tie in viewers on a long-term basis with annual plans. Netflix and Discovery+ are among those services choosing to offer a cheap ad-supported option to retain viewers.