After a period characterized by stagnant growth and a huge drop in customer subscriptions, Netflix is exploring advertisements as a way to revive its revenue performance.
The company now says it’s working with Microsoft to build a platform that will bring on board advertisers but allow users to pay less in subscriptions.
Netflix announced earlier in March that it lost over 200,000 subscribers, and expects to shed nearly two million in the second quarter of the year. It will be making its announcement on second-quarter earnings on Tuesday
Making the platform ad-supported is a belated move that has served it well so far. Competitors such as Paramount+, HBO and Hulu already have similar plans,”
“Microsoft has the proven ability to support all our advertising needs,” Chief Operating Officer Greg Peters said in a blog post on Wednesday.
Microsoft is undoubtedly a worthy partner for Netflix in this endeavour. Last month, the tech behemoth finalized the acquisition of Xandar Inc, a platform built by AT&T which allows advertisers to purchase advertisement space across thousands of websites and target audiences.
“Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members,” Peters added.
The new move will also push Netflix into a new territory where customer data and privacy will be under sharp scrutiny.
Analysts hope that as the company makes its announcements on second-quarter earnings next Tuesday, it will comprehensively answer some of these demanding questions.