Video streaming giant Netflix is reportedly making changes to its partnership with Microsoft for its cheaper, ad-supported subscription plan.
Netflix first announced its advertising partnership with Microsoft in July 2022, and launched the $7 ad-supported tier in 12 markets in November of the same year. This May, the company said that the plan approached 5 million monthly active users.
As reported by the Wall Street Journal (via Reuters), while Netflix chose Microsoft as its advertising partner partly due to its offer to pay a revenue guarantee, the streaming company is now revising the deal to lower that guarantee because the plan’s growth is slowing down.
The report further states that Netflix has held preliminary discussions to explore selling ads through alternative partners other than Microsoft. During these discussions, the company offered more attractive deals to lure advertisers, some of whom reportedly agreed to pay it approximately $39 to $45 per 1,000 viewers, which marks a decrease from the previous range of $45-$55.
Both Netflix and Microsoft haven’t released a statement on the issue yet.
The news comes just days after Netflix announced that it’s killing its cheapest plan in the US and UK, making the ad-supported tier the cheapest option in these countries.