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Netflix will rely on Microsoft to help deliver commercials

Netflix announced it would abandon its resistance to ads three months ago after disclosing it lost 200,000 subscribers during the first three months of the year.

WASHINGTON — Netflix's plans for a cheaper ad-supported option are in full swing as it will partner with Microsoft for its ad sales. 

Microsoft will become Netflix's "global advertising technology and sales partner," according to the Wednesday announcement. The alliance 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. 

The announcement pledged to minimize the intrusions into personal privacy that often accompany digital ads, but failed to disclose the price of the anticipated cheaper option.

Compared to other streaming platforms, Netflix is playing catch up on the ad revenue game. With Microsoft on its side, the streaming company plans to provide advertisers with a "better-than-linear TV brand experience."

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.

The ad changes come at a difficult time for Netflix as it faced backlash for cracking down on password sharing. For the first time in a decade, the company also saw a 200,000 subscriber dip during the January-March quarter.

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.  

In March, the streaming platform announced a crackdown on password sharing in certain countries by adding a new feature pressing consumers to pay more. In Chile, Costa Rica and Peru, members would have to pay to add extra members. 

   

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