Declining subscribers for the first time in ten years, the streaming platform has decided to launch a cheaper offer soon but with advertising.
Le Monde
This is the alliance of two giants. Microsoft announced, Wednesday, July 13, that it was going to manage advertising space sales technology on Netflix, a novelty for the streaming platform which decided to offer cheaper subscriptions but with advertising.
Netflix had expressed this decision in April, after a disappointing first quarter, where he had lost subscribers for the first time in ten years, and after years of resistance against the very idea of disseminating pubs. The launch date of this service has still not been announced.
“It is clear that it works for Hulu,” noticed the boss of Netflix Reed Hastings, in reference to a competing service, during a call conference with analysts. “If you want the Pub-free option, it will always be possible. If you prefer to pay less and to tolerate ads, there will be an offer for you too,” he added. This subscription will be added to the three options already available (“essential”, “standard” and “premium”), the cheapest being ten dollars per month in the United States.
Microsoft will be responsible for designing and managing the platform for advertisers wishing to disseminate advertisements for Netflix users. “Microsoft has the proven ability to meet all of our advertising needs by building with us a new subscription offer with advertising,” said Greg Peters, Netflix operations director, quoted in the press release on Wednesday.
Data confidentiality
According to the American specialized press, Netflix had envisaged other partners, such as Google, the world leader in advertising, and Comcast, an Internet supplier who owns Peacock, the platform of NBCuniversal.
Microsoft has the advantage of not having competing streaming services, unlike Google, Meta and Amazon, the three companies that collect about two thirds of digital advertising budgets in the United States. Microsoft “is in the fourth position” on this market in the United States, notes Emarketer’s analyst Ross Benes for the Agency France-Presse (AFP). “It represents fewer conflicts of interest for Netflix than other companies and has relations established with a large section of advertisers”.
“This contract brings him something that lacked his advertising activity-a quality inventory in video streaming, with strong growth potential”, he adds.
Netflix believes for its part that Microsoft will “allow him to innovate in a flexible way, both on the side of technology and sales techniques”, and “provides solid protections for the confidentiality of subscribers”. declared Greg Peters. Introducing advertising means to expose yourself to the questions debated for years around the personal data of consumers, harvested on a large scale to target them with personalized, more lucrative announcements.
“We are at the very beginning, but our long -term goal is clear: more choices for consumers and a premium tool for brands, better than in linear television”, detailed the director.
a leading position to maintain
Ross Benes expressed his doubts on this point, judging “curious” that Netflix preferred not to design and manage his advertising platform himself. “One of their greatest forces is their user experience,” he said. “Given the advertising formats found on Microsoft products, such as Bing and LinkedIn, this partnership indicates that pubs on Netflix will not establish a new standard in the bourgeoning streaming sector, but on the contrary imitate the usual formats, For better or for worse “.
After years of conquest of high -speed users, Netflix lost 200,000 subscribers worldwide in the first quarter compared to the end of 2021, a news that had dropped its action by 25 % at the time. The Californian group had reacted by announcing the arrival of the advertising on the service, which must help them finance the investments necessary to maintain its leader position in the industry it has launched. He also clarified that he was going to tighten the screw on the side of the sharing of identifiers and passwords, which allow many people not to pay to access the contents of the platform.