Netflix has partnered with Microsoft to launch a cheaper subscription plan showing adverts in an attempt to appeal to cash-strapped consumers.
The streaming platform first announced plans to launch a cheaper service – giving subscribers the chance to pay less in return for viewing ads – in April after reporting the first loss of subscribers in a decade. This was said to have wiped almost $60bn off its market value.
The Netflix Chief Operating Officer, Greg Peter, said: “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.”
Netflix’s surprise move to belatedly follow rivals such as Hulu, HBO Max and Paramount by launching an ad-supported package this year is expected to precede the announcement next week of a further loss of 2 million global subscribers in the three months to the end of June.
According to Peter, it’s very early days and they have much to work through. But our long-term goal is clear,” adding that more choice for consumers and a premium, better-than-linear TV brand experience for advertisers.
Netflix had reportedly been in talks with a number of partners to deliver advertising sales including Google, and Sky owner Comcast’s NBCUniversal, before signing up with Microsoft.