Netflix strikes Microsoft advertising deal, as deals with Hollywood studios reviewed

Breaking Bad

Netflix has signed up Microsoft as its tech and sales partner for its upcoming ad-supported subscription tier, following news that the streaming giant is looking to alter its deals with Hollywood studios.

The US-based streamer confirmed that it would introduce a cheaper, ad-supported offering in the wake of its first subscriber losses in a decade, with the company confident of launching it in the US later this year.

In a blog post, Netflix chief operating officer Greg Peters said: “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.”

Google and NBCUniversal had previously been touted as potential adtech partners for Netflix.

In 2021, Microsoft generated $10bn in ad revenue via services including LinkedIn and search engine Bing. The company last month completed its acquisition of AT&T’s ad platform Xandr.

The two companies are known to have a strong relationship, with Microsoft president Brad Smith having served on the Netflix board since 2015.

Hollywood dealmaking

Netflix has also reportedly begun talks with Hollywood studios to alter its programming deals. According to the Wall Street Journal, the streamer has entered into talks with Warner Bros. Universal and Sony Pictures Television, with the SVOD leader requiring approval from rights holders to place ads against their shows.

The report goes on to note that it is yet to initiate talks with Paramount Global and Sony, whose major shows on Netflix include NCIS and Breaking Bad respectively.

While it intends to launch before the end of the year, Netflix’s ad-supported tier is still in the early days of development with pricing yet to be decided.