Question
Some potential risks for Microsoft in this partnership could include the possibility of Netflix's continued loss of subscribers, which could affect the reach and effectiveness of the ads. Additionally, if the ad-supported version of Netflix is not well-received by users, it could negatively impact Microsoft's reputation.
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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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