Netflix partners with Microsoft to create an ad-supported subscription

New York (CNN Business) – You’ll soon be able to subscribe to a cheaper version of Netflix that will be ad-supported, although this option is still in the “early stage”.

The two companies announced Wednesday that Netflix will partner with Microsoft on a new ad-supported subscription plan.

The collaboration follows a surprise announcement from Netflix in April that they were open to offering a low-cost, ad-supported subscription option, something CEO Reed Hastings has rejected for years. But the company is in one of the worst stretches of its 25-year history, after Netflix reported its first quarterly loss of subscribers in more than a decade.

A release date for the new subscription category has yet to be announced, but the New York Times reported in May that Netflix told employees it could arrive by the end of 2022.

Netflix said Wednesday that the decision is “in its early days” and that the company has “a lot to discover” about offering an ad-supported subscription to its 221.6 million subscribers worldwide.

Microsoft’s massive advertising sales division will revive this option. Greg Peters, Chief Operating Officer and Director of Product at Netflix He said In a statement on Wednesday, Microsoft “provides us the flexibility to innovate” in both technology and sales, as well as ensure strong privacy protections for Netflix subscribers.

He added that Netflix’s long-term goal is clear: “greater choice for consumers and a better TV experience for advertisers.”

Netflix reported in April that it lost 200,000 subscribers in the first quarter of 2022 and expects to lose an additional 2 million subscribers in the second quarter. This news sent its shares down and investors feared not only for the future of Netflix, but for the flow of business in general.

Netflix will report its second-quarter earnings on Tuesday and all eyes will be on subscriber count.