Netflix And Microsoft Partnership Unveils The Streaming Platform’s New Ad-Supported Service

In July 2022, NetflixNFLX
named MicrosoftMSFT
as its official partner for an upcoming ad-supported version of the streaming platform. The switch from Netflix was due to several factors including increasing audience reach and mitigating subscriber losses. Netflix recently divulged more intricate details on the new initiative.

The ad-supported model, known as Basic With Ads, launched on November in 12 markets: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States. Advertisements run for around 4-5 minutes per hour and are bespoke to each market, with advertisers reportedly excited about the breadth of demographics that they can hit through Netflix.

The streamer currently supports three streaming plans. Basic, Standard, and Premium. They start at $9.99 per month with basic and end at $19.99 per month for premium. The main difference between the plans is streaming quality and the number of simultaneous streams each allows. The new ad version is $6.99 a month in the U.S.

Further details about the version were released also. Each ad will be 15 or 30 seconds in length and plays before and during TV shows and films. Advertisers have the broad targeting capability to pinpoint their audience, and Netflix also launched partnerships with DoubleVerify and Integral Ad Science to verify the viewability and traffic validity of ads starting in Q1 of 2023.

Kurt Jackson, the founder of Software Consulting Services, who installs production suites across several vertices for platforms including advertising, production, and content management heralded the partnership as groundbreaking.

“Two companies that have been leaders in their respective fields for years coming together is always going to be interesting,” he said. “Specifically because of the factors involved. Most other large companies that Netflix could have worked with are already associated with – or own – other streaming platforms, so Microsoft was the logical choice.”

Jackson also opined that implementation will be important. “The algorithms that support the ads will be key as there’s mass viewership across Netflix and you don’t want the insertion of advertising to jeopardize the viewing experience.”

“We generally work with publishers for newspapers and magazines, for an end-to-end solution. Most of the people we’re talking to have their own centers, where they do centralized production of most of their newspapers. One group that we’re working with does 140,000 pages a year. Imagine how we can help them if we take 30% to 40% of those off the table for them and do them in seven seconds. Similarly with this partnership, taking that workload away from Netflix will certainly pay dividends and allow them to have the time to focus on their expertise. Producing content and finding ways to monetize it.”

In a statement Netflix said on the launch:

“Basic with Ads will launch just six months after we first announced the option of a lower-priced ads plan. None of this would have been possible without our team’s hard work or Microsoft’s extraordinary partnership.”

“The switch from linear is happening at an ever-increasing speed, with streaming now surpassing broadcast and cable in the US. We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan. While it’s still very early days, we’re pleased with the interest from both consumers and the advertising community — and couldn’t be more excited about what’s ahead. As we learn from and improve the experience, we expect to launch in more countries over time.”