After suffering a significant loss of members earlier in the year, Netflix is attempting to introduce a more affordable ad-supported option. Along with a new ad partner—Microsoft—the streaming service is hastening the launch of this new subscription tier.
Microsoft declares that it is honored to be chosen as Netflix’s sales and technology partner. Marketers who use Microsoft for business advertising requirements get access to linked TV inventory and the Netflix audience. The only way to access any adverts displayed on Netflix will be through the Microsoft platform.
Although monthly fees can appear little in isolation, they do up over time. Several music streaming services provide a free tier, but in exchange for access, there are certain limitations. It appears that Netflix is now falling into that tendency after all these years, and for its ad-supported membership option, it has selected an unexpected partner. Let’s learn more about it below.
Highlights
- Companies utilizing Microsoft for their advertising requirements will get access to the Netflix community and premier connected TV inventory.
- Netflix appoints Microsoft as the technologies and sales partner because of its ad-supported platform.
- According to Netflix, only the Microsoft platform will be able to access any advertisements that are presented on the service.
Brief on Netflix
Netflix is a global internet streaming service that is accessible in many countries. It provides a selection of movies, TV series, documentaries, and videos to satisfy every taste. For places where it is available and where the contents may differ greatly, there is Netflix. Additionally, you may watch their original shows and movies on their streaming website or app. Additionally, the platform offers a variety of plan subscriptions to meet your streaming and watching demands!
Competition between Strange Things and Squid Game
Netflix’s subscriber appeal is fueled by shows such as Squid Game, Stranger Things & Bridgerton, but growing competition from services like Disney+, Apple TV+, & Amazon Prime Video has revealed some of the company’s flaws.
It’s no longer sufficient to only provide on-demand programming in the new world of premium streaming TV. Disney has its Disneyland, in-theater film franchise businesses, toys, and a variety of brand licensing partnerships. Apple has its hardware and software tie-ins. Amazon is not only the top online retailer; it also provides cloud services to some of the biggest businesses on the planet, like Netflix.
As a result, Netflix has steadily changed from an early digital pioneer into a one-note company with an unclear future while the streaming market is being swamped by internet giants with the potential to offer supplementary value to their users and stockholders.
Teaming up with Microsoft
To provide its users with more modest and economical subscription choices, the streaming juggernaut ties up with Microsoft. The streaming service wants to provide a lower-cost, ad-supported membership option for die-hard viewers. One explanation is that the corporation lost 35% of its enrolled consumers; during the first quarters of this year, almost 200,000 clients canceled their agreements. Additionally, according to researcher Ross Benes, they selected Microsoft as a worldwide advertising platform and sales partner. Microsoft hasn’t promoted competitor streaming solutions, in contrast to the big three ad suppliers Google, Meta, and Amazon.
Greg Peters, the chief operating officer of Netflix, writes in a blog post on the company’s users’ freedom and privacy rights. It’s still extremely early, and we have a lot to figure out. However, our long-term objective is obvious. More options for consumers and superior, non-linear TV brand experiences for marketers, according to Peters.
There are a plethora of rivals including, HBO Max, Apple TV, Disney+, & Amazon Prime. Global inflation has an impact on Netflix as well as other platform sales because individuals cut back on superfluous wants. In keeping with this, the collaboration seeks to increase viewership by keeping costs low. The potential implementation of these new ideas later this year is the sole remark about this that has been confirmed.
Additionally, the streaming service notes that it has never desired any advertisements during viewership. Microsoft is in charge of designing and running the platform for businesses interested in running advertisements. Although the rates for the plans are not yet available, we are optimistic about Netflix and Microsoft’s collaboration. In addition, Netflix recently said that it has eliminated 300 employees, or around 4% of its staff, as a result of growing competition and declining subscriber numbers.
So, when will Netflix start to run ads?
The first is that Netflix will keep its commercial plans separate from its normal ones. Because they would have adverts on them, these more recent plans might be far less expensive. Given that the mobile, basic, and regular plans in India are frequently far less expensive than those on the US market, it is unclear if Netflix will implement any modifications to these packages. With their more basic plans, rivals like Disney+Hotstar do give advertisements.
According to earlier rumors, Netflix’s ad-supported plans will be put into effect by the end of 2022. It’s uncertain whether they would be given access globally and if Netflix will introduce them in a select few countries at first. Additionally, Netflix aims to crack down on creating a shared and it may soon begin to limit access to just close family members. Customers could soon be assessed fees for sharing account passwords with friends and relatives.
Who else has the means to purchase Netflix?
A bid for Netflix has become more likely as a result of the recent slump in tech equities. When Netflix was valued a year ago, no one would have imagined that it would be bought out simply because it would have been so expensive, according to Jon Christian, owner of the tech consulting business OnPrem. The valuation would’ve been enormous, so they’re still not cheap. Therefore, only a behemoth would even consider purchasing Netflix. He points out that Microsoft is now playing on the sidelines. They haven’t made any significant TV streaming developments. So it’s interesting to consider acquisition candidates.
If a big Hollywood studio doesn’t intervene as a suitor, Google is the other internet behemoth with the resources, cloud platform, and technology to increase Netflix’s fortunes. However, its recent decision to stop producing original material for its YouTube platform suggests that it may choose to continue concentrating on user-generated programming and the data it generates.
Conclusion
At this time, it is unclear what effects this Microsoft-run advertisement system will have. Although it has a spotty history, Microsoft brags about its attitude to privacy. But more crucially, it begs the issue of whether this alliance would offend Apple and Google, which each have their ad-related policies. Even Netflix acknowledges that it is still in its very early phases, so we can anticipate learning more information in the coming months.
