Microsoft confirmed as Netflix ad partner

The form of Netflix’s ad-supported subscription tier is beginning to take shape, with the streaming company confirming that it has signed up Microsoft as its tech and sales partner for the new offering.

Netflix confirmed that it would introduce a cheaper, ad-supported offering in the wake of its first subscriber losses in a decade, with the company confident of launching it in the US later this year.

In a blog post, Netflix chief operating officer Greg Peters praised Microsoft’s “​​proven ability to support all our advertising needs as we work together to build a new ad-supported offering” and said that the Windows-maker “offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

Google and NBCUniversal had previously been touted as potential adtech partners for Netflix.

Peters added: “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.”

Microsoft meanwhile uploaded its own blog post, where Mikhail Parakhin, president web experiences, explained: “At launch, consumers will have more options to access Netflix’s award-winning content. Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. 

“All ads served on Netflix will be exclusively available through the Microsoft platform. Today’s announcement also endorses Microsoft’s approach to privacy, which is built on protecting customers’ information.”

In 2021, Microsoft generated US$10 billion in ad revenue via services including LinkedIn and search engine Bing. The company last month completed its acquisition of AT&T’s ad platform Xandr.

The two companies are known to have a strong relationship, with Microsoft president Brad Smith having served on the Netflix board since 2015.