Microsoft named Netflix advertising partner as streamer preps AVoD tier

Netflix has chosen Microsoft as its advertising partner as it forges ahead with plans to introduce an ad-supported tier.

Reed Hastings

The streamer said yesterday that the computing giant would be its global advertising technology and sales partner.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” said a blog post from Netflix chief operating officer and chief product officer Greg Peters.

“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.”

After vowing never to bring ads onto the platform, Netflix chairman and co-CEO Reed Hastings unveiled plans to introduce an ad-supported tier during its first-quarter investor call in April.

The announcement of the AVoD pivot coincided with Netflix’s first subscriber losses in more than a decade, with the company’s subscriber count dipping by 200,000.

At the time of its most recent financial filing, Netflix had around 222 million subscribers. However, it said it expected to lose a further two million in the upcoming quarter. All will be revealed next week in its second-quarter report, which is arguably the most eagerly awaited financial filing in the history of the streaming business.

When Hastings first revealed that Netflix planned to introduce ads, he said that it was something the company was “trying to figure out over the next year or two.”

However, in the time since, it has emerged that Netflix is hoping to accelerate the timeline for the launch, with reports suggesting it could roll out lower-priced plans before the end of the year.

In its Wednesday announcement, Netflix played down the urgency of launching the AVoD tier, but underscored that advertising now plays a key role in its future aspirations.

“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. We’re excited to work with Microsoft as we bring this new service to life,” the streamer said.