Netflix reportedly exploring future options for its ad business despite current Microsoft partnership

March 14, 2023

Despite its partnership with Microsoft, Netflix seems to have a plan to become independent in managing its advertising business in the future. According to a report from Digiday, the streaming giant’s recent moves could mean it is exploring other options before it has to renew its partnership with Microsoft in 2024.

In July, Netflix announced that it chose Microsoft as its “global advertising technology and sales partner,” which would use its Xandr platform to provide the advertising technology for its ad-supported tier. Netflix said Microsoft “has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering.” During that same period, a rumor started circulating about Netflix hoping to be bought by Microsoft. However, this is undermined by the new report claiming Netflix actually wants to be less reliant on Microsoft. 

According to Digiday, Netflix is now considering a variety of options, including having its own ad tech, which could be achieved either by Netflix building or buying one. As stressed in the report, this was made clear when the company chose to employ high-profile expert advisors continuously. Additionally, the media company reportedly secured the employment of Jon Whitticom, a former chief product officer at Comcast’s ad tech unit FreeWheel, as the company’s “advertising platform advisor.” Digiday said that Whitticom’s position is related to the discussions about buying or building Netflix’s own ad tech.

Apparently, having its own ad tech to support its ad business independently will mean great for Netflix. It could keep the ad revenue instead of sharing portions of it with other companies like Microsoft. However, establishing its own platform (or buying one through acquisition) for such a purpose also means additional spending for Netflix. And given that the company only has until 2024, it could be a huge challenge.

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