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The implications of Netflix's subscription losses on the streaming industry could be significant. It could lead to a shift in the market dynamics with competitors gaining more market share. It could also result in Netflix implementing new strategies to regain its lost subscribers, such as introducing an ad-supported version, as they did in this case. Furthermore, it could potentially influence other streaming platforms to diversify their revenue streams and not solely rely on subscriptions.
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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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