Nueva York (CNN Business) — Soon you will be able to subscribe to a cheaper version of Netflix that will be ad-supported, although that option is still in an “early phase”.
Netflix will partner with Microsoft for this new subscription plan with as announced by both companies on Wednesday.
The collaboration follows a surprise announcement from Netflix in April that they were open to offering a lower-cost, ad-supported subscription option, something CEO Reed Hastings had balked at for years. But the company is in one of its worst stretches in its 25-year history, following Netflix reported its first quarterly subscriber loss in more than a decade.
It hasn’t yet been announced when the new subscription category will launch, but The New York Times reported in May that Netflix told employees it might arrive by the end of 2022.
Netflix said Wednesday that the decision is “in its early days” and that the company has “a lot to figure out” regarding introducing an ad-supported subscription to its 221.6 million subscribers worldwide.
Microsoft’s formidable ad sales division will be bringing that option to life. Greg Peters, Netflix Chief Operating Officer and Product Manager said in a statement Wednesday that “Microsoft offers us the flexibility to innovate” in both technology and sales, as well as ensuring strong privacy protections for Netflix subscribers.
Netflix’s long-term goal is clear: “greater choice for consumers and a better-than-TV experience for advertisers,” he added.
Netflix reported in April that it had lost 200,000 subscribers in the first quarter of 2022 and expects to lose an additional 2 million in the second quarter. This news led to the fall of its shares and the fear of investors not only for the future of Netflix, but for the streaming business in general.
Netflix will report its second quarter earnings on Tuesday and all eyes will be on the number of subscribers.
