TECH - Together, Netflix and Microsoft have developed a free plan with adverts.
TECH - In order to provide users with a more affordable subscription option that includes commercials, Netflix has partnered with Microsoft.
The industry leader in streaming claims that the service will be a "addition" to its current subscriptions, which are free of commercials.
Following the announcement of its first subscriber drop in more than ten years in April, Netflix's stock price plummeted.
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Co-CEO Ted Sarandos stated last month that the company was in discussions with other companies to discover strategies for appealing to price-conscious customers.
The company hasn't yet specified how much users will be charged for the new service.
Netflix announced on Thursday that it had chosen Microsoft as its official global sales and advertising technology partner to launch a "lower priced ad-supported membership option."
Netflix's chief operating officer, Greg Peters, said in a statement that Microsoft "has the demonstrated capacity to serve all our advertising needs as we work together to establish a new ad-supported product."
More importantly, he continued, "Microsoft provides our members excellent privacy safeguards as well as the flexibility to evolve over time on both the technical and sales side.
Microsoft's president of online experiences, Mikhail Parakhin, predicted that users would soon have "additional ways to enjoy Netflix's award-winning content."
All ads delivered on Netflix would be exclusively available through the Microsoft platform, the executive added. "Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory.
Netflix has never desired advertisements. The basis of its entire business strategy is monthly subscriptions.
However, Netflix officials were forced to disregard their own policies.
It follows horrendous data that revealed the corporation was losing subscribers.
Additionally, as a result of the high cost of living, households have had to tighten their budgets and have begun to consider their Netflix subscription as a potential savings. Investors have becoming uneasy.
In addition, Netflix faces stiff competition from services like Apple TV, Disney+, HBO Max, and Amazon Prime.
There aren't enough paying subscribers to go around, and there are too many possibilities.
In order to react, Netflix is developing a less expensive version that will include advertisements and will launch later this year.
A similar business strategy is used by Spotify, which offers free music in exchange for watching ads.
By accepting ads, it is hoped that Netflix will draw in new customers.
But the action also demonstrates that advertising, which high-end streaming firms formerly considered to be so antiquated, are still very much in use today.
In order to include commercials as part of its service, The Wall Street Journal reported on Tuesday that Netflix is attempting to renegotiate its agreements with big entertainment companies.
According to reports, the company has talked with Sony Pictures Television, Universal, and Warner Bros.
After being contacted by the BBC on Wednesday, Warner Bros. declined to comment. A BBC request for comment was not immediately answered by Universal or Sony.
After revealing a dramatic decline in subscribers and issuing a warning that millions more were about to leave the streaming service, Netflix's shares fell by more than a third in April.
The sell-off reduced the company's stock market value by more than $50 billion, and analysts cautioned that it would be difficult for it to get back on track.
The business announced 300 job losses last month as it struggled with the decline in consumer volume.
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