Thursday, Jul 14, 2022, 17:12 Economy

Announcement – Netflix & Microsoft To Partner, Microsoft To Handle Advertising

The streaming market is hotly contested and unlike in the early days, there are now a large number of offers – with Netflix no longer serving as the default choice for the majority of users. Now, Netflix seems poised to follow the Hulu model by providing multiple subscription services as the company struggles to keep old and win new customers due to high subscription prices. This represents a significant problem, as production costs for exclusive content rise simultaneously. A few weeks ago, there was an official announcement illustrating Netflix's plan to solve the dilemma. Currently, every Netflix subscription follows the same model allowing for advertising-free streaming of any content on the site. This, however, is set to change. As more and more users expand their subscriptions to streaming services and begin to cut off the loose ends, some of the older offers on the market will be forced to adapt as customers forgo their services in favor of newer ones. Thus, Netflix is readying itself to offer a more affordable basic offer, which would include advertisements to make up for lost revenue.

Netflix To Rely On Microsoft
The exact modality of the more affordable access is still unknown, however, it is known which important partner is set to handle the development. As per a recent draft from Netflix, the company will rely on Microsoft to help implement the new advertising tariff and system. Netflix, meanwhile, will continue to focus on its core components whilst outsourcing the new business model. Microsoft will find itself responsible for both the technology behind the new model and the sale of the advertisements. Netflix will thus save itself the trouble of the the demanding development of an additional platform, as well as the assembly of a new department for advertising.

advertising


advertising


Implementation To Take Some Time
Despite the announcement, Netflix has also stated that the project is only in the beginning stages and there's still a great deal of work to be done. Thus, a speedy introduction for the new model is unlikely. The earliest release would likely be the end of this year. The longterm goal, according to Netflix, is to create more options for viewers as well as expanding the service's viewership and offering advertisers a wider audience than classic, linear TV. Rumors reveal that the subscription fees for the new, upcoming entry offer should be around US$5, or the same price as Apple TV+. 4K content is not expected to be included.

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