Netflix partners with Microsoft on new ad-supported subscription tier

Netflix is joining forces with Microsoft as it prepares to roll out advertising on the platform.

The streamer has announced a partnership with Microsoft, which will serve as its global advertising technology and sales partner as it launches a new subscription tier with ads.

Netflix confirmed a cheaper subscription tier with advertising was on the way earlier this year, despite years of resisting ads on the platform. It will be optional for subscribers who want to pay less per month, and the advertising-free tiers will remain available.

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But when Netflix confirmed it was branching out into advertising, it was expected to partner with another company in doing so, given the streamer doesn't have experience in this business. In June, The Wall Street Journal reported that the top contenders included NBCUniversal and Google, and co-CEO Ted Sarandos said, "We're talking to all of them right now."

But Netflix says it picked Microsoft because the company offered "the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members." Microsoft, meanwhile, called it a "big day" for both companies, adding that it looks forward to helping Netflix "deliver more choice to their customers."

Netflix, which is also eying a crackdown on password sharing, hasn't announced a price point for its cheaper ad-supporter tier, but it reportedly may launch before the end of 2022. The streamer said Wednesday, though, that it's still "very early days and we have much to work through."