Report: Netflix Revises Agreement with Microsoft, Reduces Advertising Costs
According to the Wall Street Journal, Netflix is making changes to its advertising collaboration with Microsoft, including reducing ad costs.
Netflix has had early discussions about selling ads through other partners besides Microsoft, the WSJ said, citing people familiar with the matter.
According to the report, the streaming company last year chose Microsoft to provide the technology and sell ads on its behalf, in part because Microsoft offered to pay a “revenue guarantee” and promised to deliver a large sum of money to Netflix.
Netflix is also modifying its agreement with Microsoft to reduce the revenue guarantee, and those terms are still being negotiated, the report added.
Microsoft and Netflix did not immediately respond to Reuters’ request for comment.
In related news, Netflix earlier this month removed its Basic plan in the US and UK, which allows users to watch shows and movies without ads, as the company tries to attract more subscribers to the ad-supported tier.
The company said on its website that the $9.99 monthly basic plan is no longer available to new or joining members. Users who are already on a plan can continue until they change plans or cancel their account.
The streaming video pioneer had launched a $7-a-month option with ads last November in 12 markets, including the US, as an alternative to ad-free plans. It was designed to attract more customers and add a new revenue stream as competition for online viewers intensified.
Netflix had also cracked down on password-sharing households in May, forcing users who share an account outside the same household to pay an additional fee, which in turn prompted a number of users to sign up for its cheaper ad tier.
