Netflix is currently struggling and therefore wants to expand its offer. The streaming service has now teamed up with Microsoft to introduce advertising to Netflix.
Things are not exactly going well for Netflix at the moment. In the first quarter of 2022, the popular streaming service had to announce a decline in its subscription figures for the first time in more than ten years.
Now comes the most logical step from a business perspective: Netflix wants to introduce an additional, ad-financed service. To this end, the streaming service has now joined forces with Microsoft.
Advertising at Netflix – what does Microsoft have to do with it?
It has been known since April that Netflix wants to expand its existing ad-free offer. This is to be supplemented by a cheaper subscription that will also show advertising on Netflix for the first time.
Netflix has teamed up with Microsoft for this. The Windows group is to act as a global partner for advertising technology and sales for the streaming service.
Microsoft has a proven ability to meet all of our advertising needs as we work together to build a new ad-supported offering.
Microsoft offers the necessary flexibility as a partner for Netflix. This is necessary for technological innovations, but also on the distribution side, he said. Microsoft also offers “strong privacy protection for our members,” he said.
When will Netflix’s subscription with advertising arrive?
A launch date for the new offering has not yet been set. According to Netflix, both companies are “still in the early stages and have a lot to do.”
However, the long-term goal is to offer customers more choice. For advertisers, Netflix wants to be a “premium, above-average TV brand experience.”
Why aren’t things going so well at Netflix right now?
For many years, there was only one direction for Netflix in terms of subscription numbers – and that was up. Now the streaming service is struggling quite a bit.
In the first quarter, the platform lost around 200,000 subscribers. One of the reasons was the withdrawal from Russia.
In March, Netflix had announced it was pulling out of Russia entirely due to the attack on Ukraine. This step alone cost the company 700,000 paying subscribers.
But Netflix’s troublesome issue of shared accounts is also a problem for the streaming service. There are a “large number of households with shared accounts.
According to company estimates, around 100 million households worldwide use Netflix without paying for the service.
But growing competition from Amazon Prime and Disney Plus is also causing problems for the streaming service. The same is true of the increased cost of living, which could well cause quite a few subscribers to cancel their subscription.