Netflix has announced a partnership with Microsoft for its upcoming ad-supported streaming tier. When the cheaper option is available, the streaming service says Microsoft will become its “global advertising technology and sales partner.”
According to a blog post on Microsoft’s website, marketers will collaborate with Microsoft to bring ads to the Netflix ecosystem. “Today’s announcement also supports Microsoft’s approach to privacy, which is based on safeguarding customers’ information,” says Mikhail Parakhin, Microsoft’s president of web experiences. Aside from Netflix, Microsoft is reportedly considering adding advertisements to free-to-play Xbox games.
Netflix first hinted at a lower-cost, ad-supported tier in May, and then confirmed it last month. Although Netflix has not announced an official release date for the tier, it is expected to be available to customers by the end of 2022. The announcement of Netflix’s ad-supported tier came after the company revealed a drop in subscribers for the first time in a decade in the previous quarter, topping out at 222 million globally. To help mitigate a drop in subscribers and revenue, the company is also looking into live streaming and ways to crack down on password sharing.
Choosing Microsoft recalls the two having a close relationship for streaming launches. The first version of Watch Instantly, which primarily streamed B-movies, used Microsoft’s Silverlight technology to deliver video rather than the more common Flash Player until it was replaced by HTML5, and the Xbox 360 was the first console to include an HD Netflix streaming app.