Netflix’s ad-supported subscription plan is really happening

Netflix partners with Microsoft for its ad-supported tier

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Netflix mobile app

Netflix’s first-ever ad-supported subscription plan is starting to take shape.

The streaming giant has named Microsoft as its partner for the ad-supported tier, which will soon join the platform’s existing ads-free basic, standard, and premium plans.

Netflix and Microsoft’s partnership

Netflix and Microsoft logos

“Today we are pleased to announce that we have selected Microsoft as our global advertising technology and sales partner,” Greg Peters, Chief Operating Officer and Chief Product Officer, Netflix, said in a statement. “Microsoft has the proven ability to support all our advertising needs as we work together to 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.”

Details on streamer’s ad-supported subscription plan, including how much it will cost, have yet to be revealed, as Peters noted that the platform’s ad efforts are still in the “very early days.”

“We have much to work through,” Peters added. “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.”

For Microsoft’s part, Web Experiences President Mikhail Parakhin said in a statement that they are “thrilled” to be picked as the platform’s technology and sales partner for the ad-supported subscription offering.

“At launch, consumers will have more options to access Netflix’s award-winning content. [And] marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory,” explained Parakhin, noting that “all ads served on Netflix will be exclusively available through the Microsoft platform.”

Parakhin also pointed out that Microsoft’s partnership with the streamer is an endorsement of the tech company’s approach to privacy, “which is built on protecting customers’ information.”

According to CNBC, the streaming service had been looking for potential partners for its ad-supported tier for the past several months, as it plans to launch the subscription offering before the end of 2022.

The streamer reportedly had talks with Google and Comcast for a potential tie-up but ultimately chose Microsoft as its technology and sales partner. Unlike Google, which owns YouTube, and Comcast, which owns NBCUniversal’s Peacock, Microsoft doesn’t operate a competing streaming service to Netflix, which makes their partnership no-nonsense.

Why is Netflix introducing an ad-supported subscription plan?

Netflix’s April announcement that it was planning on rolling out an ad-supported tier came months after the streamer started to struggle in retaining and adding subscribers. That same month, the company announced that it had lost 200,000 subscribers — the first decline in the company’s membership in more than a decade. This shocking news led to the biggest-ever one-day drop in the company’s market cap on April 20th, when the company lost $54 billion in value.

Netflix Co-CEO Reed Hastings has long been against the idea of adding ads or other kinds of promotion to the platform, but during the company’s pre-recorded earnings conference call that month, he said that it “makes a lot of sense” to offer customers a more affordable option.

What is the cheapest Netflix subscription plan currently available?

Currently, the streamer’s most affordable subscription offering is the Basic Plan. Priced at $9.99 a month, this plan lets subscribers watch Netflix on only one screen at a time. But just like Netflix’s two pricier tiers, the Basic Plan already offers unlimited movies, TV shows, and games.

The platform’s two more expensive subscription offerings are the Standard Plan and the Premium Plan. The Standard Plan costs $15.49 a month and allows subscribers to watch Netflix on two screens simultaneously. The Premium Plan, meanwhile, has a price tag of $19.99 a month and lets subscribers watch Netflix on four screens at the same time.

Find out more details about the streamer’s current streaming plans in the photo below:

Netflix subscription plans in the US