What happened now? After months of speculation, Netflix recently confirmed plans for a cheaper ad-supported tier, but the company will need a partner to help deliver those ads. The company announced this week that it has chosen Microsoft. Most of Netflix’s competitors already have ad-supported membership options.
Microsoft and Netflix have announced that all advertising for Netflix’s upcoming cheaper ad-supported tier will go through Microsoft’s advertising platform. The announcements by the companies put an end to a string of rumors about Netflix’s promotional plans.
In April, Netflix confirmed plans to offer an ad-supported subscription sometime in 2022, reversing earlier statements against the idea. A first-quarter financial report showing the first loss of subscribers in a decade may have spurred the decision, as the company fired employees in response.
Previous reports have suggested that Netflix may be working with Google or NBCUniversal to serve ads, or may even purchase Roku to speed up those plans. Adopting an ad-supported tier will put Netflix on par with competitors including Hulu, HBO Max, Paramount Plus and Peacock, and Disney+ will also pick up the trend this year.
This week’s announcements didn’t reveal details about what Netflix’s ad-support tier might look like, when it launches or how much it will cost. Netflix currently starts at $10 per month. HBO has similar pricing with ads, while Disney+ costs $8 without ads. Netflix’s ad-supported pricing will have to compete with Hulu’s $7 ad tier and Paramount Plus’ $5 ad tier.
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