US streaming giant Netflix has chosen to partner with Microsoft to launch cheaper but ad-supported subscriptions.
Netflix made the decision after a disappointing first quarter in which it lost subscribers for the first time in a decade.
“It’s clearly working for Hulu,” Netflix president Reed Hastings said, referring to a competing service, in a conference call with analysts, adding that the new format should be up and running in a year or two. You want the ad-free option it will still be. Be available. If you prefer to pay less and can tolerate ads, there will be an offer for you as well.
This subscription will be added to the three options already available (“Basic”, “Standard” and “Premium”), the cheapest of which is ten dollars per month in the US.
Microsoft will be responsible for designing and managing the platform for advertisers who want to display ads to Netflix users.
“Microsoft has a proven ability to meet all of our advertising needs by creating a new ad-supported subscription offering with us,” Greg Peters, Netflix’s chief operating officer, said in a statement Wednesday. “Most importantly, Microsoft gives us the ability to flexibly innovate into the future, both technically and in terms of sales, and provides strong privacy protections for its subscribers.”
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