The tech giant will serve as the streamer’s exclusive ad partner
It doesn’t seem like anyone is particularly happy with Netflix these days. Despite the continued success of hits like Stranger Things, it’s been a rough year for the streaming pioneer. In response to the company’s first decrease in subscribers in more than ten years, Netflix has teased plans to roll out a cheaper, ad-supported plan — something offered by the competition that it has long avoided. With today’s announcement, Netflix has announced its ad partner in a quest to regain viewers, and it’s a name familiar to most.
Microsoft will take part in the streaming giant’s ad-supported tier, becoming Netflix’s global advertising technology and sales partner along the way. According to today’s announcement from COO Greg Peters, Microsoft isn’t just ready to supply ads for this low-cost tier — it’s ready to bring some innovation to ads in the streaming game as well, all while offering “privacy protections” for subscribers. For its part, Microsoft says any ad served to a Netflix viewer will be through its platform exclusively, taking the potential of other sales partners off the table.
A deal as interesting as this is bound to lead to speculation, especially as Netflix’s ad plan shapes up. While a focus on ad sales and privacy is to be expected, emphasizing the potential for innovation in ads is an interesting approach. Most of us are probably familiar with streaming ads through Hulu and other competitors, inserting ad breaks either organically — specifically when the material was originally produced for broadcast TV, where ad breaks are commonplace — or by selecting specific points in movies and other uncut material to fade to black. It’s unclear if Netflix hopes to utilize its partnership with Microsoft to find a more organic way of placing ads — specifically in its movie library — or if it’ll fall in line with the rest of the industry. After all, focusing on a sense of innovation here could just be generic corporate speak.
Peters says Netflix is still in the early days of building its ad-supported tier, though earlier rumors suggested a launch before the end of the year. Considering 30% of respondents in our recent poll were considering canceling their plan altogether, cheaper offerings cannot come soon enough.
