Netflix has hired Microsoft to provide the advertising technology for its planned tier of ad-supported streaming service, the companies announced Wednesday. Comcast subsidiary NBCUniversal and Google were reportedly “top contenders” to serve ads on Netflix before Microsoft won the contract. Microsoft will be the “global ad technology and sales partner” for its “new, lower-priced ad-supported subscription program,” Netflix said Wednesday. “Microsoft has the proven ability to support all of our advertising needs as we work together to create a new ad-supported offering,” Netflix said. “Most importantly, Microsoft has provided the flexibility to innovate over time on both the technology and sales sides, as well as strong privacy protections for our members.” The ad-supported streaming subscription will be offered “in addition to our existing ad-free basic, standard and premium plans,” Netflix said. Netflix also said it’s still “very early and we have a lot to work on” before rolling out the ad-supported tier, though the company recently told employees it plans to roll it out by the end of this year. The ad plan was announced in April by CEO Reed Hastings amid slowing revenue growth and subscriber losses. Netflix has not said how much it will charge for the ad-supported tier. US Netflix prices currently range from $9.99 to $19.99 per month. Advertising
Microsoft’s purchase of the AT&T division helped it win the deal
Microsoft issued its own press release stating, “All ads served on Netflix will be exclusively available through the Microsoft platform.” Microsoft said Netflix’s choice “supports Microsoft’s approach to privacy, which is based on protecting customer information.” Microsoft has served ads on its Bing search engine and its predecessors for years, but its ability to land the Netflix contract was reportedly due to AT&T’s purchase of its Xandr programmatic advertising system. “It was the Xandr purchase that gave Microsoft the technology it needed to become a contender in the high-profile race to win the partnership with Netflix, people familiar with the matter said,” the Wall Street Journal wrote. Microsoft’s choice “surprised some ad industry executives because Microsoft is not as well known for its video advertising capabilities as other companies,” the WSJ wrote.
