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Netflix names Microsoft as partner for ad-supported subscription plan
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(Reuters) -Netflix Inc said on Wednesday it has selected Microsoft Corp as technology and sales partner for its planned ad-supported subscription offering, as the streaming giant looks to plug slowing subscriber growth by rolling out a cheaper plan.
(Reuters) -Netflix Inc said on Wednesday it has selected Microsoft Corp as technology and sales partner for its planned ad-supported subscription offering, as the streaming giant looks to plug slowing subscriber growth by rolling out a cheaper plan.
Shares of Netflix rose 2% to $178.06 on the news.
Netflix said in April that it would introduce a new, lower-priced version of its service in a bid to attract more subscribers. The announcement came as the pioneering subscription service posted its first subscriber loss in more than a decade, and projected deeper losses to come.
Chief Operating Officer Greg Peters said in a blog post that Netflix chose Microsoft because of its ability to innovate, as well as for its strong privacy protections.
“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,” Peters said.
Microsoft President Brad Smith has served on Netflix’s board since 2015.
The partnership announcement comes ahead of Netflix”s second-quarter earnings report on Tuesday. The company cautioned investors it could lose as many as 2 million subscribers in the period, despite the return of such popular series as “Stranger Things,” which broke viewer records.
Netflix joins a number of its rivals in offering ad-supported service, including Walt Disney Co’s Hulu, NBCUniversal’s Peacock and Warner Brothers Discovery’s HBO Max.
Disney also plans to introduce a version of Disney+ with commercials.
Researcher Comscore Inc said such ad-supported services are seeing a faster rate of adoption than subscription services, as inflation pinches consumers’ wallets.
“The time is ripe for traditionally subscription-based streaming services like Netflix to consider launching an ad-supported tier to enhance their growth trajectory,” Comscore’s James Muldrow said in a statement.
(Reporting by Chavi Mehta in Bengaluru and Dawn Chmielewski in Los Angeles. Editing by Sriraj Kalluvila and Nick Zieminski)
An ad-supported subscription plan is a service model where users pay a lower fee to access content in exchange for viewing advertisements during their experience.
Subscriber growth refers to the increase in the number of users or customers who subscribe to a service, indicating its popularity and market demand.
A technology partner is a company that collaborates with another organization to provide technological solutions, support, or services to enhance business operations.
Privacy protections are measures and policies implemented to safeguard personal information and data from unauthorized access or misuse.
An advertising revenue model is a business strategy where a company generates income by displaying ads to its users, often in exchange for free or discounted services.
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