On Tuesday, Netflix unveiled its second-quarter earnings following a massive loss in subscribers earlier this year. Overall, the streaming platform performed significantly better the second time around. Now though, aside from revenue, the streaming company has unveiled its targeted release date for its ad-supported plan.
According to Variety, Netflix’s new ad-supported streaming package is set to make its debut in early 2023. In a recent Q2 letter, it said, “We’ll likely start in a handful of markets where advertising spend is significant.”
The statement further read, “Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering.” In doing so, their upcoming advertising business “will likely look quite different than what it looks like on day one.”
So far, the outlet states the fan-favorite streamer has not released prices for its upcoming ad-supported plan. That said, company representatives have promised the new plan provides subscribers with a considerably cheaper streaming option. Currently, the Standard plan costs subscribers about $16.00 a month.
Meanwhile, Netflix’s co-CEO and chief content officer said the company is currently in discussions with some of its content providers. Together, they’re working out rights issues ahead of unveiling the new ad-supported plan.
Netflix Partners Exclusively With Microsoft For Ad-Supported Plan
Last week, before announcing its targeted release date for its ad-supported plan, Netflix revealed it had partnered with Microsoft who, for now, will exclusively manage the streaming platform’s ad content.
According to Bloomberg, Microsoft generated $10 billion in advertising sales in 2021. As such, it makes the company a suitable partner for the decreasingly popular streamer.
In a statement regarding the company’s new partnership, Greg Peters, Netflix’s Chief Operating Officer, said, “Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering.”
At first glance, the streaming company’s partnership with Microsoft came as a surprise. More than anything, Microsoft does not serve as a forerunner and leader in advertising technology and sales, especially compared to companies like Comcast and Google. However, it’s exactly that reason Netflix chose to partner with the ad industry’s underdog. First, Microsoft has a global presence. Additionally, the company isn’t “competitive” like its cohorts.
Overall, Netflix has a lot of new ground to navigate. However, Bloomberg further pointed out that the company’s upcoming ad-supported plan has not only caused a rift with viewers. It could also potentially affect the company’s relationship with various actors, producers, directors, and even entire media companies. Given the new plan, these individuals will need to decide whether they’re comfortable maintaining their positions with Netflix on its new plan.