Netflix Names Microsoft as Technology and Sales Partner for Ad-Supported Subscription Plan

Netflix shares rose 2 percent to $178.06 (nearly Rs. 14,100) after it announced to partner with Microsoft for the ad-based subscription plan.

By Reuters | Updated: 14 July 2022 01:08 IST

Photo Credit: Netflix

Microsoft President Brad Smith has served on Netflix's board since 2015.

Highlights

Netflix announced in April that it would introduce a new service
Netflix chose Microsoft because of its ability to innovate over time
Netflix is looking to tweak its programming deals with Hollywood studios

Netflix said on Wednesday that it has selected Microsoft as technology and sales partner for its planned ad-supported subscription offering, as the streaming giant looks to plug slowing subscriber growth by rolling out a cheaper plan.

Shares of Netflix rose 2 percent to $178.06 (nearly Rs. 14,100) on the news.

Netflix announced in April that it would introduce a new, lower-priced version of its service in a bid to attract more subscribers. The announcement came as the pioneering subscription service posted its first subscriber loss in more than a decade, and projected deeper losses to come.

Netflix Says It's 'Actively' Working on Ad-Supported Subscription Model

Chief Operating Officer Greg Peters said in a blog post that Netflix chose Microsoft because of its ability to innovate over time, as well as its for its strong privacy protections.

“It's very early days and we have much to work through. But our long-term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers," Peters said.

Microsoft President Brad Smith has served on Netflix's board since 2015.

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Microsoft also announced the news in a blog post stating that "at the launch, consumers will have more options to access Netflix's award-winning content."

It was reported earlier on Wednesday that Netflix is looking to tweak its programming deals with Hollywood studios to enable the streaming pioneer's launch of an advertising-supported version of its service, as per a The Wall Street Journal report.

The company has started talks with Warner Bros., Universal, and Sony Pictures Television, the report said, citing people familiar with the matter.

Google, NBCUniversal Lead Bid for Netflix Ad-Supported Plan Tie-Up: Report

It will also need to renegotiate agreements for older television shows such as Breaking Bad from Sony and NCIS from Paramount Global, according to the report.

Netflix told Reuters it is still in the early days of deciding how to launch a lower priced, ad-supported option, and added that it is all just speculation at this point.

Warner Bros., Universal, and Sony did not immediately respond to Reuters requests for comment.

Earlier in June, co-CEO Ted Sarandos said Netflix is in talks with several companies for advertising partnerships.

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