Netflix Turns to Microsoft for Ad Service

Netflix Turns to Microsoft for Ad Service

Netflix Announces New PARTNERSHIP – Prepare For Change

( – When Netflix began in 1997, it was primarily a video rental company that did all its business through the mail. As the internet got faster and bandwidth became cheaper, it increased its service to include options for streaming on its site, leading to the enormous company Americans know today that even has original programming. However, the platform hit some rocky times lately, pushing it to turn to Microsoft as it looks to kickstart an ad-based subscription option.

Netflix and Microsoft Team Up

On Wednesday, July 13, Netflix Chief Operating Officer (COO) and Chief Product Officer Greg Peters announced the company chose Microsoft as the streaming behemoth’s “global advertising technology and sales partner.” He noted Microsoft’s adherence to strict privacy protections as a key factor for choosing them over companies like Google or Comcast.

The COO hopes this decision will provide “more choice for customers and a premium, better-than-linear TV brand experience for advertisers.”

Currently, Microsoft’s advertising sector only provides around 6% of the company’s total revenue, according to CNBC, showing this is a massive win for the company that has been battling with Google for business for decades.

A Major Shift in Netflix’s Business Plan

In an internet world powered by ads, Netflix had long opposed adding the often annoying videos to its site. However, in the first quarter of 2021, it lost 600,000 subscribers as they left for competing platforms or simply needed to cut back on spending amidst ongoing inflation. This loss caused Netflix’s stock to tank 70% year-to-date. Netflix plans to announce its quarterly report on Tuesday, July 19, and some experts predict it will post losses of up to 2 million additional subscribers.

Netflix hopes its decision to supply a subscription service will bring back some subscribers who left and keep others who are on the fence about leaving.

When To Expect This New Ad-Supported Netflix

While Netflix will still offer a more expensive ad-free subscription, it hopes to roll out the more budget-friendly ad-based subscription service before the end of 2022. The anticipation of this new era of Netflix did bump the stock up 2% on Wednesday, July 13, although that’s only a small percentage compared to recent losses.

Do you think Americans will be willing to come back or stay at Netflix with the soon-to-be ad service to catch hit TV shows like “Stranger Things” and “Squid Game”? Or is it too little too late for the streaming service in a world where every network seems to have its own platform?

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