Netflix announced its ad-supported tier back in April, following its first fall in subscribers in more than a decade. There's still no word on when it will launch (just "later this year") or how much it will cost, but we do know it will be cheaper than its current cheapest tier, which costs £5.99 ($8.99, AU$10.99) a month.
"Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering," said Greg Peters, Netflix's chief operating officer and chief product officer. "More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members."
At the start of the year, Netflix lost 200,000 subscribers when it was expected to add 2.5 million. It's not the end of the story, either – it now expects to lose another 2 million subscribers for the period of April to June.
It hopes an ad-supported tier will help reverse these losses by attracting more people to the service.
Previously, Netflix ruled out ever showing adverts. But the rising cost of living, plus increased competition from the likes of Disney Plus, HBO Max, Amazon Prime Video and more means the streaming giant has had to take a different tack. We'll be watching closely to see if it pays off.
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