Netflix will be ditching its partnership with Microsoft as part of this new plan to build its own ad-tech platform.
👉 Background: Last month, Netflix announced its profit had gone gangbusters - partly from its password crackdown, partly from its new content (hello Baby Reindeer) and of course largely thanks to its ad-supported tier.
👉 What happened: Now, Netflix has announced that 40 million users have jump onto the ad-supported plans. That’s up from just 5 million ad-supported users just 12 months ago. And it will be building its own ad-tech platform to compete with Meta and Google.
👉 What else: As part of this new plan, Netflix will be ditching its partnership with Microsoft, who previously helped the 'Flix get up to speed with ads.
💡When a business is building out a new feature or project, there’s one key question: do we build or do we buy? Do we keep things in-house, or outsource it to the professionals?
💡 For Netflix, outsourcing to Microsoft when it first announced its ad-supported plan meant it didn’t need to invest billions of dollars (and time) into custom-building its own system. It could get live quickly and see whether there was demand.
💡Now, Netflix has confidence in its ad-supported future. In fact, it reckons its ad revenue could grow to $5 billion USD per year in the near future…so it can’t be relying on external parties anymore for such a core part of its business.
Sign up for Flux and join 100,000 members of the Flux family
