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Microsoft announced today that they have been selected as a new partner to help launch an ad-supported subscription to Netflix.
Beat Google and NBC. Last month we did reported that NBCUniversal and Google were the frontrunners, so the announcement that Microsoft was chosen comes as quite a surprise. “Unlike the top three ad sellers in Google, Meta and Amazon, Microsoft has not pushed competing streaming products,” said Insider Intelligence principal analyst Ross Benes.
What does that mean. Despite rising revenue, Netflix’s share of total OTT subscription revenue is declining. It had 49.1% of all OTT subscription revenue in the US in 2018, which is expected to drop to 29.3% by the end of this year. “This deal gives Microsoft something its growing advertising business has been missing – quality streaming video inventory that has the potential to scale. Microsoft, the fourth largest ad seller in the US, offers fewer conflicts of interest to Netflix than some other companies and has strong relationships with a wide range of advertisers,” says Beneš.
What Netflix Says.
In April, we announced that we would be launching a new, lower-cost, ad-supported consumer subscription plan in addition to our existing ad-free Basic, Standard, and Premium plans. Today we are pleased to announce that we have chosen Microsoft as our global advertising and sales partner.
Microsoft has a proven ability to support all of our advertising needs as we build new ad-supported offerings together. More importantly, Microsoft has offered the flexibility to innovate over time on both the technology and sales sides, as well as strong privacy protections for our members.
It is still very early and we still have a lot of work to do. But our long-term goal is clear: more choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We are excited to work with Microsoft as we bring this new service to life.
Official announcement. There isn’t much information yet about the partnership or when the new ad-supported options will begin, but you can read Microsoft’s official announcement here. We contacted Microsoft for a quote.
Why do we care? Advertisers should benefit from additional ad placement options, especially on a platform as large as Netflix. And those who have been sleeping on Microsoft or CTV advertising in general should jump at the chance.
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