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· Posted on
February 21, 2024

Not only is Netflix planning to offer a cheaper version with ads, it's partnering with Microsoft to get it done

Netflix is teaming up with Microsoft to offer customers a cheaper plan supported by ads.

What's the key learning?

  • In April, Netflix lost subscribers for the first time in a more than a decade.
  • Netflix is partnering with Microsoft to outsource the ad sales and distribution for its new service.
  • Outsourcing can have major benefits for Netflix, but it's also a risk because the company won't have much control over its new ad service.

👉 Background: We know Netflix has been on the rocks lately. Not even a huge debut of Stranger Things season four could save the company from the doldrums.

👉 What happened: In April, Netflix announced it had lost subscribers for the first time in more than a decade. So, it announced plans to offer a cheaper Netflix plan, which included ads. Just imagine Frank Walker from National Tiles appearing in the middle of Squid Game. Weeeeeird.

👉 What else: Now, it has gone a step further and announced that it's partnering with Microsoft to outsource the ad sales and distribution for its new service. It looks like Netflix has chosen the outsourcing route to hit its launch deadline of the fourth quarter this year.

What's the key learning?

💡When a business is building out a new feature or project, there’s one key question: keep things in-house, or outsource it the professionals? For Netflix, there is a risk in outsourcing. It means it won't have quite as much control over its new ad service.

💡But outsourcing can also have major benefits like saving money and speeding up turnaround times. And you can also learn from someone who already knows what they're doing.

💡We know Netflix had some tight timeframes to get this baby live, so we can see why the company decided to outsource. And its shares climbed 1.2% at the news!

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