Streaming giant Netflix announced last night (Wednesday) that it will soon allow its customers to purchase a cheaper package with commercials.
The move is expected to be implemented as part of a partnership with Microsoft.
The announcement of the collaboration with Microsoft came after Netflix's official announcement that advertisements will soon appear on its content platform.
The announcement was considered very surprising as company CEO Reed Hastings objected to placing advertisements for years.
The move of course does not come just by chance.
Netflix has recently been going through one of its most difficult periods since it was founded 25 years ago.
The first quarter of 2022 was the first in the last 10 years in which it lost subscribers.
The streaming giant did not give an official date when the discounted version will be launched, but the company said the move is in the early stages and added that "there is a lot to work on" to launch the package to its 221.6 million subscribers worldwide.
The New York Times reported that the package is expected to launch in late 2022.
Greg Peters, Netflix's chief operating officer and chief product officer, said Microsoft offered flexibility in both technology and sales.
On top of that, according to Peters, the technology giant has promised to introduce high information security for Netflix customers.
Reed Hastings, CEO of Netflix. Previously opposed adding commercials, Photo: Reuters
"Netflix's long-term goal is clear: more consumer choice," Peters said.
He added that the additional goal is to ensure advertisers a better and better TV experience than that provided by linear TV.
As you may recall, in April Netflix reported that it lost 200,000 subscribers in the first quarter of 2022 and that it expects to lose another 2 million in the second quarter.
This news led to a drop in stock value - and scared investors not only about the future of Netflix, but about the entire streaming industry.
It should be noted that next Tuesday Netflix will report earnings during the second quarter of 2022, when all eyes of investors will be on the number of its subscribers.
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