Netflix Flicks the Ad Switch

As Netflix moves full tilt towards developing their ad-supported service tier, they have announced their global technology partner that will be making it all happen. Microsoft has been named their technology and sales partner and given the discussions on the topic at Cannes just a few weeks ago, it’s a choice that makes a lot of sense. 

Ted Sarandos, Co-CEO of Netflix took the stage in France last month to discuss the future of entertainment and the role that Netflix will play in the years to come. Citing that only 30% of overall video consumption is done through streaming, Sarandos is bullish about the growth opportunity that lies ahead. When it comes to content, the message is clear – scale and variety is the key to keeping audiences engaged and close to the Netflix brand.

When asked about what the ads might look like at launch, Sarandos downplayed the plans and made it clear that the ads will look familiar in terms of format but got pretty excited about the future state. It is clear that the plan at Netflix is to innovate and create more immersive experiences for audiences that will be well-tolerated and even celebrated by viewers. In the short term, Microsoft will have access to the Netflix audience and premium connected TV inventory and all ads served on Netflix will be exclusively available through the Microsoft platform.

Interestingly, Netflix has big plans to get into the gaming scene with their Q4 2021 launch of Netflix games. Microsoft’s access to PC and console gamers coupled with their access to CTV pipeline makes the choice a natural fit. We will continue to track the progression of this fascinating journey towards ad-supported CTV content.