Netflix to rely on Microsoft for its ad-backed video service | AP News

  

Category:  News & Politics

Via:  perrie-halpern  •  4 weeks ago  •  32 comments

By:   MICHAEL LIEDTKE

Netflix to rely on Microsoft for its ad-backed video service | AP News
SAN FRANCISCO (AP) — Netflix has picked Microsoft to help deliver the commercials in a cheaper version of its video streaming service expected to launch later this year with a pledge to minimize the intrusions into personal privacy that often accompany digital ads.

S E E D E D   C O N T E N T



SAN FRANCISCO (AP) — Netflix has picked Microsoft to help deliver the commercials in a cheaper version of its video streaming service expected to launch later this year with a pledge to minimize the intrusions into personal privacy that often accompany digital ads.

The alliance announced Wednesday marks a major step toward Netflix's first foray into advertising after steadfastly refusing to include commercials in its video streaming service since its inception 15 years ago. Netflix announced it would abandon its resistance to ads three months ago after disclosing it had lost 200,000 subscribers during the first three months of the year amid stiffer competition and rising inflation that has pressured household budgets, causing management to realize the time had come for a less expensive option.

Netflix has warned it will likely report even larger subscriber losses for the April-June period, increasing the urgency to roll out a cheaper version of its service backed by ads to help reverse customer erosion. That decline has contributed to a 70% decline in its stock price so far this year, wiped out in about $190 billion in shareholder wealth and triggered hundreds of layoffs.

The Los Gatos, California, company is scheduled to release its April-June numbers on July 19, but still hasn't specified when its ad-supported option will be available except it will roll out before 2023. Netflix's announcement about the Microsoft partnership also omitted a crucial piece of information: the anticipated price of the ad-supported option.

"It's very early days and we have much to work through," Greg Peters, Netflix's chief operating officer, said in a post that also highlighted Microsoft's "strong privacy protections."

Landing the ad deal with a video streaming service that boasts more than 220 million subscribers represents a major coup for Microsoft, which has been engaged in a long-running and often acrimonious battle for the past 20 years with Google, the dominant force in digital advertising.

"This deal gives Microsoft something its growing ad business has lacked — quality streaming video inventory that has potential to scale" said Insider Intelligence analyst Ross Benes.

Mikhail Parakhin, Microsoft's president of web experiences, said the Redmond, Washington, company is "thrilled" with Netflix's choice in a post that also underscored the company's commitment to privacy.

While Microsoft still makes software that powers most of the world's personal computers, Google has become increasingly powerful through its dominant search engine, ubiquitous Android software for smartphones and other popular digital services that last year generated more than $200 billion in ad revenue — far more than any other marketing network.

But Google ad sales depend heavily on the personal information that its mostly free services collect about their billions of worldwide users, a form of surveillance that Netflix evidently wants to avoid with the commercial interruptions in its video service to lessen the chances of alienating subscribers. Google also owns YouTube's video site, which already competes against Netflix for people's attention and will soon be an advertising rival, too.

Microsoft also may have had another factor working in its favor. Netflix Inc.'s co-founder and co-CEO, Reed Hastings, served on Microsoft Corp.'s board of directors from 2007 to 2012.

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Revillug
Freshman Guide
1  Revillug    4 weeks ago

How times have changed that we are now relieved to hear of Microsoft as a kinder and gentler alternative to another brutal tech giant.

My favorite MS product was Qbasic. Oh, and Notepad.

 
 
 
CB
Professor Principal
2  CB     4 weeks ago

Netflix is a good, scratch that great service. I guess I could pay more, because I do COMPREHEND the amount of work that goes into putting an entire series online at once and commercial free. You leave a lot of capital out and on the table! That said, the future of NETFLIX is up in the air for me if it become "meh" streaming television. Because I don't know it that way.

That said, again, I have been impressed by what I see on Netflix and it ability to entertain.

 
 
 
Revillug
Freshman Guide
2.1  Revillug  replied to  CB @2    4 weeks ago

Worst case scenario: it could wind up like Hulu.

My latest peeve with streaming services is with paramount+. I recently got turned on to Yellowstone which is carried on the paramount network. I found the commercials a bit tedious and subscribed to paramount+ in order to dodge the commercials. Turns out Yellowstone isn't even carried on paramount+ but you can't figure that out until you subscribe. Similar games are being played by AMC with Better Call Saul.

All these damned subscriptions!

 
 
 
CB
Professor Principal
2.1.1  CB   replied to  Revillug @2.1    4 weeks ago

Subscriptions. Like so many passwords can be 'batty' I will agree. And I do work at it to make sure I don't let them get away with me (and my money). Something just struck me, will Netflix take the PBS ('tasteful' commercials) or network style ('full-on' commercials) - because the latter is free tv channels. Wait! Cable TV is not free. . . just how much money does it take to run a damn media industry?!

 
 
 
Revillug
Freshman Guide
2.1.2  Revillug  replied to  CB @2.1.1    4 weeks ago
Like so many passwords can be 'batty' I will agree.

The most confusing thing I encountered was trying to keep the HBO or Showtime roku apps activated when you get the subscriptions  through a cable provider or YoutubeTV. I'm not even sure you can accomplish it on the Roku alone. You have to go over to your desktop and then circles of hell ensue. 

With the way inflation is spiking I just dropped YoutubeTV and started using Philo instead. No matter what combination of streaming packages I use at any given time it seems like way too much money for a whole lot of reality TV shows.

 
 
 
CB
Professor Principal
2.1.3  CB   replied to  Revillug @2.1.2    4 weeks ago

I got so 'twisted' with Comcast (when Covid-19 flared up in 2020 my cable two-years contract came unglued and eventually I got angry) that I told them to take all their premium channels back. Now I watch those programs only when they are on a special free week of programming or some such thing. I don't really miss them.

It's all too much! Blah! They are spread to wide with an interest here and an interest there.

The one thing I don't have and miss consistently is: Wild-life channel. It pulled out of the cable line-up and became a subscription. I simply can't go back "in" for it. I won't. So I catch as catch can.

As you may have observed I am a Youtube 'fan.' So I get hit with an offer to get YoutubeTV everytime I am on Youtube. I almost did try it. But no.

Because I started with a Roku device years ago, I continue to use Roku Express instead of using the options on my smart tv to view streaming shows. It may not be efficient, but I admit it is getting confusing to me as to how to condense everything down!

 
 
 
Revillug
Freshman Guide
2.1.4  Revillug  replied to  CB @2.1.3    4 weeks ago

What I do miss about YoutubeTV is the unlimited cloud DVR which holds recordings for nine months. That in combination with local broadcast affiliates including PBS made it a pretty powerful streaming package. And of course YTTV has a large selection of cable channels. The downside is the price. It's $65 a month. You aren't saving that much money over a cable package. But one advantage with YTTV's cloud DVR is that for most programming you can easily fast forward through the commercials. on Philo ($25 a month and no local affiliates) you are forced to watch the commercials.

 
 
 
JohnRussell
Professor Principal
2.1.5  JohnRussell  replied to  Revillug @2.1.4    4 weeks ago

I think the way to do this, for those who want to save money, is to rotate a few streaming services in and out of your active subscription list. 

One month you might have HULU, Prime , and Paramount Plus, and the next month it might be Netflix, HBO , and Sling. A third month can be othe channels or a combination of any of them. Right now I have HBO Max, Prime, and Fubo. Total is about a hundred bucks but it is still less than I was paying for cable without HBO or Prime. 

 
 
 
CB
Professor Principal
2.1.6  CB   replied to  Revillug @2.1.4    4 weeks ago

As I age, I must admit I 'tire' easily, maybe even am a bit confused, though I am still analyzing if its me or them, of all these deal/packages. I just tend to take the trials and repeat trials and leave the deals on the counter (passed up).

My bottomline is I declared myself content with what I have and don't even mostly engage the offers much.

 
 
 
CB
Professor Principal
2.1.7  CB   replied to  JohnRussell @2.1.5    4 weeks ago

Good idea. But. Netflix is a done deal with me. That is, unless the commercials kill the spirit of the 'thing.'  As for me, I still have my cable subscription (Deluxe package) intact and bundled with internet and phone. It is not cheap monthly. That said, I have bounced in around in my head about stripping down to basic cable/phone/internet and adding those subscription channels 'galore' until I am satiated. There are other family members involved with their own shows scattered around the cable menu, nevertheless.

Subsequently, I stay 'pat.'

 
 
 
Ender
Professor Principal
2.1.8  Ender  replied to  CB @2.1.7    4 weeks ago

I still have Uverse. The only subscription I have is paramount+ and the free version of Peacock.

 
 
 
Revillug
Freshman Guide
2.1.9  Revillug  replied to  JohnRussell @2.1.5    4 weeks ago

That's pretty much what I have settled on doing. In my house there is no getting around having a Starz subscription when a season of new season of Outlander is dropping. Likewise Hulu gets reupped when Handmaid's Tale or The Great is showing. Prime is sort of a given since I subscribe to it for free shipping and the better returns policy. There is always something to watch on Netflix.

 
 
 
CB
Professor Principal
2.1.10  CB   replied to  Ender @2.1.8    4 weeks ago

This is what I got for you and I believe this about AT&T since the 90's when I left them:

Big Old Expensive Phone Company Ad

Every now and then, I will call or even go into Comcast and remind them of this commerical! On such occasions I call Comcast: The BOE Cable Company!

 
 
 
CB
Professor Principal
2.1.11  CB   replied to  Revillug @2.1.9    4 weeks ago

What the "h" is up with Prime anyway? That is, why do they have a 'subset' of movies you can subscribe to in Prime and then pay for other (new) movies separately. They are doing this all wrong! That said, I pause and renew my Prime subscription as needed.  :)

NOTE to self: I need to call Amazon Prime and remark that some of those prime movie offers I can't get through them without turning them off as insufficient and others I would not watch with somebody else eyeballs!

 
 
 
CB
Professor Principal
2.1.12  CB   replied to  CB @2.1.10    4 weeks ago

BTW, the floor people and counter people at Comcast (makers of the original BOE Phone Company ads) don't think my 'take' on the BOE Cable Company is funny at all. They just stare back at me. Well! (Channeling Samantha Stevens-"Bewitched.")

 
 
 
JohnRussell
Professor Principal
2.1.13  JohnRussell  replied to  CB @2.1.7    4 weeks ago

Something like Sling or Fubo or You Tube TV can basically replace cable for about 1/2 the price. They have many of the same channels to the extent that the average viewer wouldnt think they were missing anything. The "premium" channels like HBO or Showtime cost extra though. 

 
 
 
CB
Professor Principal
2.1.14  CB   replied to  JohnRussell @2.1.13    4 weeks ago

That is a great insight. I did not know it or understand how it works or comes together. I will have to ask Sling about it. I have not heard of "Fubo" YoutubeTV is asking me dang near every other day when I pull videos from the site. :)

BTW, would it bug you that Google owns YoutubeTV and may know too much about you? I recently opted for DuckDuckgo search engine to curtail my Chrome search usage. :)

 
 
 
Revillug
Freshman Guide
2.1.15  Revillug  replied to  CB @2.1.14    4 weeks ago

After checking out Fubo TV it looks to me like YoutubeTV is not only $5 cheaper but better. 

YoutubeTV is $65 a month and gives you unlimited cloud storage. It has a lot of the local broadcast affiliates. If you get HBO through them you can DVR most of their live programming. 

One thing I did notice was that sometimes the stuff you DVR on YTTV can be a little grainy. When I dropped YTTV and switched to Philo I was impressed with how sharp the picture quality is.

Now of the picture quality on Fubo is better than YTTV I could see the choice getting harder.

 
 
 
CB
Professor Principal
2.1.16  CB   replied to  Revillug @2.1.15    4 weeks ago

Oh. . . my head. So much to choose from. I feel overwhelmed! Blah! Plop! Plop! Fizz, fizz, oh what a relief it is. :)

 
 
 
Revillug
Freshman Guide
2.1.17  Revillug  replied to  CB @2.1.16    4 weeks ago

There is one choice that stands out for price: Philo. It's only $25 a month and has unlimited DVR hours but only retains recordings for about a month. The way it achieves this price point is that it doesn't carry FoxNews, CNN or MSNBC or much in the way of sports channels. It does however carry BBC news which I think is a great alternative to the political propaganda channels. As far as the rest of the cable channels it has just about every one that you would think you want.

$25 a month plus an antenna and the PBS app and you are pretty much good to go.

 
 
 
CB
Professor Principal
2.1.18  CB   replied to  Revillug @2.1.17    4 weeks ago

Hmmm. Sounds interesting this "Philo."  First time hearing about it. Will look on Friday. For the record, I adore me some MSNBC and CNN they are go-to for news and background 'noise' when on the computer. Or reading online. Being candid, I probably would be looking for a reason not to take this swell offer of 25.00 a month, because of the two networks (as I am a new Junkie for well over two decades now!).

 
 
 
Revillug
Freshman Guide
2.1.19  Revillug  replied to  CB @2.1.18    4 weeks ago
For the record, I adore me some MSNBC and CNN they are go-to for news and background 'noise' when on the computer.

There is a free option for that: Pluto TV. Pluto is owned by the same people that own Hulu. All of its channels are ads supported so the app is free. There is a cat video channel, which is my go to PlutoTV destination. My cat used to jump on the TV stand to be with the other cats but he has figured out it's fake. There are also channels that show Star Trek all day long or The Rifleman all day long, etc. There are news channels also. There are CNN and MSNBC channels but they are not  the livestream. They are sort of curated "best of" content over the last 24 or 48 hours. In some ways they are better than the actual live streams.

I've grown fond of Newsy for live news. It's somehow manages to be both young and centrist in its orientation. Lots of talk about the climate. I think Newsy is on Pluto but I prefer to watch it with an antenna (it's available in my area) because the commercials get way too loud when you stream it.

 
 
 
CB
Professor Principal
2.1.20  CB   replied to  Revillug @2.1.19    3 weeks ago

You are quite a devotee to the knowledge of these products. I commend you and appreciate this amount and degree of sharing. For I do see the some of the offerings on my smart tv, but I am like a deer in headlights blinking as I wonder how to 'plug' this one in, turn this one off, restart an 'oldie but truer goodie,' or 'dismount' from Comcast (and take a 'hit on the two-year contractual penalty).

 
 
 
Revillug
Freshman Guide
2.1.21  Revillug  replied to  CB @2.1.20    3 weeks ago

The Cable bill had been irritating me for quite a few years because it seemed to increase nearly every single month and now the sudden spike in inflation has me looking at every one of my bills for something that can be cut.

 
 
 
CB
Professor Principal
2.1.22  CB   replied to  Revillug @2.1.21    3 weeks ago

I hear you! Although, it is the reason why I chose a two-year contract and they must abide by not 'fluctuating" it -even for inflation. Which is a reason I am hesitant to break it. Because, as I mentioned above, in 2020's pandemic beginning, that summer 2020, COMCAST's workforce broke my contract through a misunderstanding of what I requested, and would not reinstate it. Eventually, my anger did not subside and it let to me telling it to take all of its premium channels and stuff 'em! :) 

Best decision ever.

 
 
 
Revillug
Freshman Guide
2.1.23  Revillug  replied to  CB @2.1.22    3 weeks ago

I do miss one thing that I have not been able to replace since I canceled SpectrumTV in NYC: their local news channel, NY1. It has simply the best local news reporting and an irreplaceable nightly program on New York City and New York State politics.

NPR does have some excellent local political coverage but it's not as concise. 

 
 
 
Drinker of the Wry
Freshman Principal
3  Drinker of the Wry    4 weeks ago

I don’t know how that happened, the equipment of butt texting?

 
 
 
evilgenius
PhD Guide
4  evilgenius    4 weeks ago

I still waiting to see how this all plays out. I think we are near max saturation of subscribers amongst all the streaming services and now it's about churn. Who's going to keep subscribers longer? That comes down to content and I don't think a paid advertising tier will attract too many subscribers long term.  

I'm still betting Disney folds in Hulu before this is all done.

 
 
 
CB
Professor Principal
4.1  CB   replied to  evilgenius @4    4 weeks ago

There will be winners and losers in this market. Like everything else in the tech age, we are being inundated with choices and decisions to make.

 
 
 
JohnRussell
Professor Principal
4.2  JohnRussell  replied to  evilgenius @4    4 weeks ago

HULU is coming on in terms of content. I believe they had way more shows nominated for Emmys this time than ever before. 

 
 
 
Ender
Professor Principal
5  Ender    4 weeks ago

So people will still have to pay for netflix and watch adds....

 
 
 
CB
Professor Principal
5.1  CB   replied to  Ender @5    4 weeks ago

Netflix is the 'hit! I have seen some major/deep programming on Netflix. Damn the ads coming. . . but I knew it was too good to be true. Being able to watch a season of a new show without waiting, for me, is 'hot.'

I still remember this one:

Sense8 | Official Trailer [HD] | Netflix

It 'blew' my mind. Especially when they (8 people across the planet) had mind-connected sex. Every time I see the 'stroller' with Sense8 on it. . . I think back to it.  Who does something like that?

Anyway, Netflix only did two seasons, and had to end production. Later, I found out that travel and production cost filming around the world was prohibitive. The series was 'perfect.'

 
 

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