Netflix rehauls advertising partnership with Microsoft, slashes prices

2 min. read

Published onJuly 27, 2023

published onJuly 27, 2023

Share this article

Read our disclosure page to find out how can you help Windows Report sustain the editorial teamRead more

Netflix, the popular streaming service, is taking a step back to reevaluate its advertising partnership with tech giant Microsoft, preparing for an anticipated decline in ad prices, according to areport in the Wall Street Journalpublished on Thursday.

The restructuring comes following the firm’s introduction of a lower-priced ad-supported subscription plan last year which was met with a disappointing response in terms of growth.

Moreover, the move corresponds with the streaming company’s effort to attract customers to its $7-per-month subscription plan. The plan, which embedded commercials in the content, was introduced in 12 different markets across the globe, including the United States. For this enterprise, Microsoft was selected as Netflix’s technology and sales partner, largely thanks to its agreed-upon revenue guarantee.

However, the failure to achieve anticipated ad tier growth rates is causing the streaming giant to reconsider the financial facets of the agreement. The media company is contemplating cutting down on the revenue guarantee with Microsoft according to the report. There is an undercurrent of dissatisfaction among Netflix executives over Microsoft’s inability to sell as much ad inventory as originally expected.

Adding to this, Netflix has started preliminary discussions with other potential partners for selling ads. Promising these partners better deals, Netflix seems to be shopping around to find options beyond just Microsoft.

This shift could potentially bring more variety in advertisement sales strategy for Netflix.

The restructuring plan also comes with a knock-on effect on the cost of advertising. Advertisers are now agreeing to pay Netflix roughly between $39 and $45 per 1,000 viewers, as per recent deals. This marks a significant drop from the previously standing rate of about $45 to $55 per deal, as acknowledged by ad buyers.

While this ongoing recalibration poses a shift in Netflix’s business strategy, how it will play out in the long term remains to be seen.

ViaInvesting.com

Radu Tyrsina

Radu Tyrsina has been a Windows fan ever since he got his first PC, a Pentium III (a monster at that time).

For most of the kids of his age, the Internet was an amazing way to play and communicate with others, but he was deeply impressed by the flow of information and how easily you can find anything on the web.

Prior to founding Windows Report, this particular curiosity about digital content enabled him to grow a number of sites that helped hundreds of millions reach faster the answer they’re looking for.

User forum

0 messages

Sort by:LatestOldestMost Votes

Comment*

Name*

Email*

Commenting as.Not you?

Save information for future comments

Comment

Radu Tyrsina

With KB5043178 to Release Preview Channel, Microsoft advises Windows 11 users to plug in when the battery is low#

Copilot in Outlook will generate personalized themes for you to customize the app#

Microsoft will raise the price of its 365 Suite to include AI capabilities#

Death Stranding Director’s Cut is now Xbox X|S at a huge discount#

Outlook will let users create custom account icons so they can tell their accounts apart easier#

Netflix rehauls advertising partnership with Microsoft, slashes prices#

With KB5043178 to Release Preview Channel, Microsoft advises Windows 11 users to plug in when the battery is low

Copilot in Outlook will generate personalized themes for you to customize the app

Microsoft will raise the price of its 365 Suite to include AI capabilities

Death Stranding Director’s Cut is now Xbox X|S at a huge discount

Outlook will let users create custom account icons so they can tell their accounts apart easier

Netflix rehauls advertising partnership with Microsoft, slashes prices