We are undoubtedly in the era of streaming, as most people prefer to stream their music, video games, movies, and TV series instead of buying physical copies. Platforms like Netflix, Spotify, Microsoft Games Pass and Amazon Prime have all seen massive success over the past 5-10 years or so, as streaming has become a staple for the modern human being.
The beauty of streaming is that it allows people from all around the world to enjoy the best media on offer, without having to spend as much as they normally would buying separate physical copies. Netflix has been the dominant force in the world of movie and television streaming, and they are looking to update their service and platform by entering into an agreement with Microsoft to create an entirely new ad-based platform.
The Partnership
Bill Gate’s company Microsoft and Netflix announced their intention to enter into a partnership in mid-2022 and a few details have been discussed, about what the agreement between the two companies will entail. Microsoft has pledged to provide Netflix with global advertising technology in order to create a subscription-based platform that will be cheaper than Netflix currently is, while also running ads during streaming. Many fans of the streaming platform have reacted to the news with outrage claiming that the ad-free service provided by Netflix was one of the main reasons that the platform initially became so popular.
Netflix COO Greg Peters was extremely happy about the agreement and stated that the long-term goals of the company in partnership with Microsoft are to create choices for consumers in terms of which streaming service they choose to use. He went further by stating that the platform that is going to be created through the closing of this business partnership with Microsoft will be one that is better-than-liner television as a brand experience. Netflix has stated that its marketers will work with Microsoft to bring ads into the streaming services ecosystem. The two companies believe that with the addition of ads, they will gradually be able to lower the cost of a subscription, which will benefit both the provider and consumers in the long term.
Microsoft is not new to the ad business, and they are reportedly starting to bring this decision into many of their other services. Recent reports have stated that the company wants to start including ads into their Xbox Live Game Pass service, meaning that advertisements will most likely litter the inline gaming sphere in the future as well.
Cheaper Ad-Supported Tier
Netflix understands that many consumers wouldn’t mind paying the premium price to get a service that is devoid of ads, even if means spending some of their bingo online for moneywins. In reaction to this news and the outrage caused by the announcements of additional ads, Netflix has been pondering the idea of having a tier-based subscription service, where the cheapest tier of subscription will be supported by ads, while the premium, more expensive tier, will be ad-free.