Microsoft announced Wednesday that it will manage the technology for selling ad space at streaming giant Netflix, which seeks to offer cheaper subscriptions but not including ads.

Netflix made its decision after a disappointing first quarter losing subscribers for the first time in 10 years, and after years of resisting the idea of ​​advertising.

“Obviously this works for Hulu,” said Netflix CEO Reed Hastings, referring to a rival service during a conference call with analysts.

“If you want the ad-free option, it will still be possible. If you prefer to pay less and tolerate advertising, it will be an option for you as well,” the manager added.

This subscription will add to the three already existing subscribers (Essential, Standard, and Premium), with the cheapest being $10 per month in the United States.

Microsoft will be responsible for designing and managing the platform for advertisers who want to serve targeted ads to Netflix users.

“Microsoft has a proven ability to respond to all of our advertising needs by creating a new ad-supported subscription offer with us,” Netflix COO Greg Peters said in a statement.

data privacy

According to US expert media, Netflix has considered other partners such as Google, the world leader in advertising and owner of YouTube, as well as Comcast, an internet provider that owns the NBCUniversal platform Peacock.

Unlike these companies, Microsoft does not have a video streaming service, although it does have services such as the LinkedIn social network and XBox video games.

“Microsoft gives us the ability to flexibly innovate in the future, both on the technology side and sales techniques, and also provides strong privacy protections for our subscribers,” said Greg Peters.

Promoting advertising essentially means exposing yourself to issues that have been debated for years around consumers’ personal data obtained at scale to target more lucrative personalized ads to users.

“We’re at the beginning, but our long-term goal is clear: more choice for consumers and a premium tool for brands better than linear television,” said the director.

After years of conquering its users, Netflix lost nearly 200,000 high-speed subscribers worldwide in the first quarter alone compared to the end of 2021, causing its share to drop by 25% at the time.

The Californian group reacted by announcing that ads were coming to the streaming service, which should help fund investments to maintain its leading position in this industry.