Netflix Cuts Ad Prices, Restructures Partnership With Microsoft: Report

Netflix has reportedly held early discussions to sell ads through other partners apart from Microsoft and has also offered them better deals.

By Reuters | Updated: 27 July 2023 13:41 IST

Netflix Cuts Ad Prices, Restructures Partnership With Microsoft: Report

Photo Credit: Netflix

Some advertisers have agreed to pay Netflix roughly $39 to $45 per 1,000 viewers in recent deals

Highlights

Netflix unveiled $7 per month plan with ads last year in 12 markets
Last week, Netflix reported a lackluster revenue rise
The company is now reworking agreement to reduce the revenue guarantee

Netflix is restructuring its advertising partnership with Microsoft for its lower-priced ad-supported subscription plan and is also cutting ad prices, the Wall Street Journal reported on Thursday.

The streaming company launched the $7(roughly Rs. 560)-per-month plan with commercials last year in 12 markets, including the US, to attract more customers and selected Microsoft as its technology and sales partner for the offering, partly because it offered to pay a revenue guarantee, the report said.

Netflix is now reworking the agreement to reduce the revenue guarantee due to slowing growth of the ad tier, the report said, adding that company executives are frustrated that Microsoft has not sold more ad inventory.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

In addition, Netflix has held early discussions to sell ads through other partners apart from Microsoft, and has also offered them better deals, the report said.

Some advertisers have agreed to pay Netflix roughly $39 (roughly Rs. 3,100) to $45 (roughly Rs. 3,600) per 1,000 viewers in recent deals, according to ad buyers, down from around $45 to $55 (roughly Rs. 4,500), WSJ said.

Microsoft and Netflix did not immediately respond to Reuters' request for comment.

Netflix Adds 6 Million Subscribers After Password Crackdown

Last week, the video-streaming company reported a lackluster revenue rise which sparked concerns of a longer road to growth from its new initiatives, with co-CEO Greg Peters cautioning it would take "several quarters" to see returns from those efforts.

© Thomson Reuters 2023

Samsung launched the Galaxy Z Fold 5 and Galaxy Z Flip 5 alongside the Galaxy Tab S9 series and Galaxy Watch 6 series at its first Galaxy Unpacked event in South Korea. We discuss the company's new devices and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.