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The potential reactions from Netflix's subscribers to the ad-supported version could vary. Some subscribers might appreciate the lower cost option and be willing to watch ads. Others might be frustrated by the interruption of ads and choose to unsubscribe or upgrade to an ad-free plan. There might also be a group of subscribers who are indifferent to the change.
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Why did Netflix choose Microsoft as its ad partner? On Netflix's Q2 earnings call, the company announced it lost 970,000 subscribers. This was Netflix's second straight quarter of subscription losses, after it lost 200,00 in Q1. To make up for this lost market share, Netflix needed a plan: and that plan became the launch of an ad-supported version. A few months later, Netflix had a partner to run these ads: Microsoft.
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