Netflix will rely on Microsoft for its ad-supported video services

Netflix will rely on Microsoft for its ad-supported video services

(San Francisco) – Netflix has chosen to help Microsoft deliver ads on a cheaper version of its video streaming service that is expected to launch later this year, with promises to reduce intrusion into personal privacy that often accompanies digital advertising.

Read more: Advertising is officially coming to Netflix. Here’s what it means for you

After refusing to include ads on its video streaming service 15 years ago, the alliance announced Wednesday that it was taking a big step toward its first campaign in Netflix advertising. Netflix has announced that it will abandon its resistance to advertising after revealing it lost 200,000 subscribers in the first three months of the year amid stiff competition and rising inflation that has weighed on family budgets, making management realize the time has come for less expensive alternatives.

Netflix has warned that it will likely report even greater customer losses for the April-June period, increasing the need to roll out a cheaper version of its services backed by ads to help counteract customer losses. The fall has contributed to a 70% fall in its stock price so far this year, costing shareholders nearly $ 190 billion in assets and starting hundreds of layoffs.

Read more: Inflation, passwords and tickling: the real threat to the future of Netflix and streaming

LOS ANGELES, California – The company will release its April-June numbers on July 19, but has not yet specified when it will roll out before 2023 unless an ad-supported option is available. Netflix’s announcement of a Microsoft partnership also omitted a significant portion of the information: the expected value of the ad-supported option.

“This is a very early day and we have a lot of work to do,” said Greg Peters, Netflix’s chief operating officer, in a post highlighting Microsoft’s “strong privacy protection.”

Landing an advertising deal with a video streaming service that represents a major coup for Microsoft, proud of its more than 220 million subscribers, has been engaged in a long and often intense battle with Google, the dominant power of digital advertising, over the past 20 years. .

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“The deal gives Microsoft something it lacks in its growing advertising business – quality streaming video inventory that has the potential to scale,” said Ross Benes, an insider intelligence analyst.

Mikhail Perkhin, president of Microsoft’s Web Experience, said the company was “thrilled” with the choice of Netflix in a post by Redmond, Washington, which also underscored the company’s commitment to privacy.

While Microsoft is still developing software that powers most of the world’s personal computers, Google has become increasingly powerful through its influential search engine, ubiquitous Android software for smartphones, and other popular digital services that generated more than $ 200 billion in advertising revenue last year. More than any other marketing network.

But Google’s ad sales rely heavily on personal information that most of its free services collect about its billions of users worldwide, a form of surveillance that Netflix explicitly seeks to avoid commercial barriers to its video services to reduce the potential for customer isolation. Google also owns YouTube’s video site, which is already competing against Netflix for public attention and will soon be competing with an ad.

One more factor could work for Microsoft. Reed Hastings, co-founder and co-CEO of Netflix Inc., served on the corporation’s board of directors from 2007 to 2012.

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