Netflix names Microsoft as technology and business partner for ad-supported subscription plan

Netflix said on Wednesday it had selected Microsoft as a technology and business partner for its planned ad-supported subscription offering, as the streaming giant seeks to make up for slowing subscriber growth by rolling out a cheaper plan.

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

Netflix announced in April that it would launch a new, cheaper version of its service in a bid to attract more subscribers. The announcement came as the pioneering subscription service posted its first loss of subscribers in more than a decade and predicted bigger losses to come.

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

“We are only at the very beginning and we have a lot to do. But our long-term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers,” said Peters.

Microsoft Chairman Brad Smith has served on Netflix’s board since 2015.

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

It was reported earlier on Wednesday that Netflix was looking to change its programming deals with Hollywood studios to allow the streaming pioneer to launch an ad-supported version of its service, according to a Wall Street Journal report.

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

He will also have to renegotiate deals for older TV shows such as Sony’s Breaking Bad and Paramount Global’s NCIS, according to the report.

Netflix told Reuters it was in the early stages of deciding how to launch a cheaper, ad-supported option, and added that it was just speculation at this stage.

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

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

© Thomson Reuters 2022

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