Streaming giant Netflix has announced that it is bringing ads to the platform in partnership with Microsoft. The company gave minor details about its plans, but has said that it will introduce a new plan in addition to the ad-free Basic, Standard, and Premium plans that will show ads to users. Let us take a look at everything we know about Netflix’s plans to put ads on the platform.
In a blog post, Netflix has said that it has partnered with Microsoft as the “global advertising technology and sales partner.” The company says that Microsoft has the proven ability to support all their advertising needs as the two companies 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,” Netflix has said. While Netflix says that the plan is in very early days, let us take a look at everything you need to know about ads on Netflix.
WHY IS NETFLIX BRINGING ADS ON ITS PLATFORM
Netflix’s announcement came after the company reported a drop in subscribers in the last quarter. With that, Netflix is making more efforts to acquire new customers. To attract new customers, Netflix will bring a cheaper subscription plan, which will run ads, according to the company. Currently, the cheapest Netflix plan is Rs 149 per month, which gets users the “Mobile” plan that only runs 480p video on one smartphone or tablet at once.
ADS TO BRING MORE MONEY FOR NETFLIX
Given its close to 222 million user-base, Netflix has enough data to sell advertisements easily. Partnering with Microsoft will also help the company develop ad tools and sales. While advertisers will love an opportunity to advertise on Netflix, the new plan will also bring a new subscription, which could be more popular in countries like India where people don’t necessarily pay for premium subscriptions.
Netflix is also discouraging password sharing. The company had announced this year that it will levy a nominal fee for those who are sharing their passwords with their acquaintances. In March, Netflix launched a pilot in three countries (Peru, Costa Rica, and Chile).
WHEN ARE ADS EXPECTED TO COME ON NETFLIX
Netflix, in its blog post, said that the new plan is in very early stage right now. Given that this is the first official announcement, we expect the new tier to be rolled out in the next few months. Netflix says that its aim is to give users more options and a better-than-linear TV brand experience for advertisers.
WHAT IS MICROSOFT’s ROLE AS A PARTNER
In another blog post, Microsoft said that it is “thrilled to be named Netflix’s technology and sales partner to help power their first ad-supported subscription offering.” The company says that all ads served on Netflix will be exclusively available through the Microsoft platform. This means that marketers looking at Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory.