In April, following a poor showing in the first quarter of 2022, which saw declining revenue and its first drop in subscribers in more than a decade, Netflix announced a cheaper subscription plan at the cost of including ads.
This cheaper plan, with the intention of re-attracting a large part of the lost public, already has a company that will be in charge of the advertising management of this new subscription independent of the three current Netflix price plans (basic, standard and premium) .
Netflix signs with Microsoft
Microsoft will be the “global ad technology and sales partner” for the new, lower-priced ad-supported subscription plan, beating Comcast and Google, who were the top contenders to run ads on Netflix before Microsoft won the deal.
Netflix-Microsoft Agreement
“Microsoft has the proven ability to meet all of our advertising needs as we work together to create a new ad-supported offering. More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales sides, as well as strong privacy protections for our members,” said Greg Peters, Netflix COO. in a recent company publication.
At the moment the prices and features that this subscription will have have not been disclosed. We can only assume that it will cost less than the current Basic subscription, which is priced at 7.99 euros per month for simultaneous playback on a single device and without reaching HD resolution.
The purchase of Xandr has been the key
In the statement issued by Microsoft it simply replicates Greg Peters’ statement, but they also say that “All ads posted on Netflix will be available exclusively through the Microsoft platform.” Microsoft also said that the choice of Netflix “supports Microsoft’s approach to privacy, which is based on protecting customer information.”
Netflix
Although not its core business, Microsoft already has experience managing ads, having been doing so on the search engine Bing and its predecessors for many years, but its ability to get the Netflix deal, as reported in the Wall Street Journal, was due to the purchase of AT&T’s Xandr programmatic advertising system.
“It was the purchase of Xandr that gave Microsoft the necessary technology to become a competitor in the high-profile race to win the partnership with Netflix, people familiar with the matter said,” wrote the WSJ. Microsoft’s choice “came as a surprise to some advertising industry executives because Microsoft is not as well known for its video advertising capabilities as other companies.”
