Netflix And Microsoft Team Up For An Ad-Supported Streaming Tier

Today’s announcement is a bit curious and slightly surprising in that few probably expected Microsoft would have a role to play in Netflix’s new business strategy. Microsoft is best known for its desktop software and its Azure cloud services, and the latter sounds like a fit for Netflix. However, the streaming company already uses AWS for all its cloud needs, and its partnership with Microsoft focuses on the part of the software giant that few probably even know about.

Microsoft will be Netflix’s official and exclusive ad platform, which basically means it will be powering the upcoming ad-supported tier. Any and all ads you’ll see on Netflix will come from Microsoft’s platform only, giving marketers and advertisers a new audience to tap into. Given the prevalence of Netflix’s brand, it’s definitely no small matter, and it could effectively raise the profile of Microsoft’s ad platform.

The implications of this Microsoft-run advertising system are still unknown at this point. Microsoft boasts about its approach to privacy, though it doesn’t have a clean track record. More importantly, it raises the question of whether this partnership will run afoul of Google and Apple, considering these two have their own rules when it comes to ads. Even Netflix admits that it’s still in the very early stages, so we expect to hear more details in the months to come.