Microsoft and Netflix Partner For New Ad-Supported Tier

Microsoft posted on the Official Microsoft Blog a post titled: “Netflix names Microsoft as partner for new consumer subscription plan”. Part of it says:

We’re thrilled to be named Netflix’s technology and sales partner to help power their first ad-supported subscription offering.

At launch, consumers will have more options to access Netflix’s award-winning content. Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. All ads served on Netflix will be exclusively through the Microsoft platform. Today’s announcement also endorses Microsoft’s approach to privacy, which is built on protecting customer’s information.

This is a big day for Netflix and Microsoft. We’re excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers…

Netflix posted on their About Netflix website a post titled: “Netflix to partner with Microsoft on new ad supported subscription plan”. It was written by Chief Operating Officer and Chief Product Officer of Netflix, Greg Peters. Part of the post says:

In April, we announce that we will introduce a new lower priced ad-supported subscription plan for consumers, in addition to our existing ads-free basic, standard and premium plans. Today we are pleased to announce that we have selected Microsoft as our global advertising technology and sales partner.

Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering. 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…

The Verge reported that Microsoft will become Netflix’s “global advertising technology and sales partner” upon rolling out the cheaper option. (This is, of course, referring to the “ad-supported” option.)

According to The Verge, Netflix’s decision to choose Microsoft: recalls a close relationship between the two for streaming launches. The first version of Watch Instantly that streamed mostly B-movies used Microsoft’s Silverlight technology to deliver video instead of the more common Flash Player until it was replaced by HTML5, and the Xbox 360 was the first console with an HD Netflix streaming app.

How well will the “ad-supported” subscription plan go over with customers? That remains to be seen. It is possible that people who want to watch things on Netflix, but who don’t have a lot of money to spend on subscription services, might give it a try.

On the other hand, Netflix and Microsoft could potentially stuff way too many ads into the “ad-supported” plan. Doing so would be a big mistake, especially if ads pop up in Netflix’s TV shows or movies, entirely breaking the immersion that people want to feel while being entertained.