So the new deal means if you want your monthly Netflix fees cheaper, you will have to sit through commercials. Netflix has teamed up with Microsoft to offer a cheaper subscription plan to customers that will show adverts.
The streaming giant says the service will be an “addition” to its existing plans, which do not include adverts. The company has not yet revealed how much it plans to charge subscribers for the new service.
Netflix announced the move after it reported its first subscriber loss in more than a decade and cut hundreds of jobs earlier this year. It lost 200,000 subscribers between January and March.
Netflix never wanted ads. Its entire business model was built around monthly subscriptions. Yet Netflix executives have had to rip up their own rules.
Netflix also has huge competition from the likes of Amazon Prime, HBO Max, Apple TV and Disney+.
There are too many options and not enough paying subscribers to go around, says the CEO.
To adapt, Netflix is creating a cheaper service – with adverts – that it says will be rolled out later this year.
The hope is that Netflix, by embracing ads, will attract new audiences.