Netflix is expected to launch a lower-cost ad-supported option in late 2022, announcing its partnership with Microsoft as its "global advertising technology and sales partner" to help the streaming service earn revenue through ads.
The announcement came a day after Disney disclosed its ad tech deal with The Trade Desk. The launch of an ad-supported tier for Disney+ is coming soon, and Disney's announcement could mean that advertisers can target a family-friendly audience.
"This is a big day for Netflix and Microsoft," wrote Mikhail Parakhin, president of Web Experiences, Microsoft, in an official blog. "We're excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers."
Marketers that work with Microsoft will be able to tap into Netflix's audience of 221.6 million subscribers. The tech company generated $10 billion in advertising sales last year and is known for its approach to privacy and protecting its customers' information.
Netflix COO Greg Peters released a statement saying, "It's very early days, and we have much to work through. But our long-term goal is clear: More choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We're excited to work with Microsoft as we bring this new service to life."
Since the company wanted to prioritize privacy for its ad-supported tier, picking Microsoft seemed like the best option for the streamer. "Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members," Peters added.
Netflix interviewed many potential partners, including Google and Comcast, but ultimately decided on Microsoft as it prepares to launch the tier before the end of 2022.
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