In April, Netflix had announced that it was planning on rolling out an ad-supported tier after losing 200,000 subscribers during the first three months of the year.
This partnership marks a major step toward the streaming giant’s first foray into advertising after steadfastly refusing to include commercials since its inception 15 years ago.
In a statement, Netflix COO Greg Peters said that Microsoft has the ability to support the streaming giant’s needs.
“Microsoft has the proven ability to support all our needs as we together 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 COO Greg Peters said.
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Peters further said that it’s very early days and they have much to work through while he also highlighted Microsoft’s “strong privacy protections”.
The partnership could prove to be beneficial and work out just smoothly. Netflix Inc.’s co-founder and co-CEO, Reed Hastings, served on Microsoft Corp.’s board of directors from 2007 to 2012.
The streaming giant has been interviewing potential partners for the last several months including Google and Comcast.
The troubling part for Netflix has always been its prices. In June, the ‘Stranger Things’ streamer’s co-CEO Ted Sarandos had confirmed that Netflix was planning to introduce a cheaper ad-supported tier to bring in customers who do not want to pay Rs 500 monthly for a Standard plan which offers 1080p.
The streaming platform’s Premium plan starts at Rs 649 which offers 4K+HDR resolution. Netflix is still the only streaming platform that charges extra for improved streaming quality. The tie-up with Microsoft will provide Netflix customers cheaper streaming plans but then it won’t be ad-free.