Netflix originally announced its upcoming ad-supported subscription plan to be offered alongside its Ad-free basic, standard and premium plans. The company is now announcing that it has selected Microsoft as their 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.”

Greg Peters, Chief Operating Officer and Chief Product Officer

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, Microsoft’s Mikail Parakhin, president web experiences at Microsoft said. “All ads served on Netflix will be exclusively available through the Microsoft platform. Today’s announcement also endorses Microsoft’s approach to privacy, which is built on protecting customers’ information. “

One thing is for sure, Netflix needs to launch this low-price ad-supported tier soon, so it can stop hemorrhaging subscribers. Netflix has been losing subscribers for three primary reasons, it’s ever-increasing plan prices and increased competition from alternative services. Those reasons are inflation, plan price increases and losing excess subscribers gained during 2020 and 2021.

Over the last two years, inflation had outpaced typical inflation growth, reaching record breaking highs in 2022 making everything a family buys or subscribes to more expensive, forcing everyone to make hard choices. Families have had to unsubscribe from apps and services they can no longer afford or choose their favorites to keep if they can, but ultimately people tightening their financial belts has led to Netflix losing subscribers. As lock-down states joined open states, Netflix started to lose the excess subscribers it gained during 2020 and 2021.

Offering a free ad-supported plan would potentially regain some of its more price conscious subscribers and retain any users that may be rethinking their subscription because of the worsening economic outlook.