After losing a massive number of subscribers earlier this year, Netflix is finally trying to launch a cheaper ad-supported plan. And the streaming service is fast-tracking this new membership tier with a new advertising partner—Microsoft.
Several major companies were competing for this partnership, which could generate billions of dollars in ad revenue. But Netflix says it selected Microsoft for its “flexibility” and “strong privacy protections.” Evidently, Google and Xfinity didn’t fit those criteria.
Microsoft echoes this commitment to privacy in its press release, though neither company really explains what that entails to the end user—perhaps Microsoft will collect less data than the typical advertising giant. (For what it’s worth, we recently learned that Microsoft has an exclusive tracking deal with DuckDuckGo. The company’s interest in privacy is questionable.)
I should note that this is one of the largest advertising deals obtained by Microsoft. The company recently bolstered its ability to compete in video advertising with the acquisition of Xander, a former AT&T property. As The Wall Street Journal reports, Microsoft is probably using Xander to deliver ads through Netflix.
We don’t know how much Netflix’s ad-supported tier will cost. But Netflix claims that ads will be non-invasive. Hopefully, customers will only see ads at the beginning and end of shows or movies.