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Netflix taps Microsoft to run its upcoming advertising-based plan

Netflix and Microsoft today announced that the two companies are teaming up for the streaming service’s upcoming advertising-based plan.

And, well, that’s it. The most important question for anyone not named Microsoft or Netflix is, of course, just how much that plan will cost. It’ll be “lower priced,” Netflix says, but not free. But we still don’t know the price. Suffice to say it’ll be less than $10 a month, however.

Stranger Things on Netflix.
Phil Nickinson/Digital Trends

“It’s very early days and we have much to work through,” Netflix Chief Operating Officer and Chief Product Officer Greg Peters said in a press release. “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.”

Netflix currently has three streaming plans. The “Basic” plan runs $10 a month and is only available in standard definition. The “Standard” plan ramps things up to high definition and theses in the ability to watch on two devices at once, all for about $16. And the “Premium” plan adds 4K resolution and four devices at once for $20 a month.

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Also unknown is exactly what form the ads will take. Streaming services have gotten creative of late. Pre-roll ads are simple enough, wherein you watch ads before your content starts. Mid-roll ads also are possible given how much made-for-TV content Netflix has, with the ad breaks already built into the shows. Or there could be advertising when you pause a show. Or you also could imagine Netflix going the route of Roku, with display ads tucked in amongst all the other on-screen content.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Peters wrote. “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 finally relented to the idea of an ad-based subscription plan after posting its first quarterly loss in subscribers for the first time in a long time in Q1, just a couple hundred thousand subscribers. The company predicted a loss of some 2 million subs for the second quarter, however, and it’ll release the actual numbers on July 19.

So for now, we wait and see just what Netflix has up its sleeves, and just how many more subscribers it can squeeze out of it.

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