business news Netflix soon to be acquired by Microsoft? The rumor swells after the agreement between the two giants!
Only a few days ago, and after months of rumors and innuendo, Netflix took the plunge. In the near future, the SVOD platform will soon offer a new subscription integrating advertisements. But Netflix will not embark on this solo adventure.
Netflix and Microsoft join forces: a cheaper subscription with advertising in preparation
Concretely, Netflix’s idea would be to finance itself and attract a new audience by offering a cheaper subscription, but incorporating advertisements. A way to maybe compensate for the loss of 200,000 subscribers announced in the first quarter, and to offer a more attractive entry offer.
No launch date has been announced for this possible subscription, but a huge announcement has however been made: Netflix has signed a partnership with Microsoft. The Redmond firm indeed becomes the “Global Advertising Technology and Business Partner”. The company run by Satya Nadella at, according to Netflix, proven that it has the means to support the advertising needs linked to this new offer, which is however not new in the middle of streaming platforms. To go further, Netflix even indicates that:
Microsoft also offers flexibility in innovation, both on the technology and sales side, but also in ensuring strong privacy protection for our members.
For its part, Microsoft addressed advertisers, indicating that those who have agreed with the company will have access to the Netflix audience but also to “the premium inventory of the connected TV service”. Anyway, this new subscription project still seems to be in full design, and we will have to be patient before we see it happen. The announcements obviously had a great impact, and given rise to many rumors. Some are far-fetched, but some analyst firms believe that the agreement, as well as the way it was announced, actually conceals a much larger project.
The Netflix / Microsoft partnership, the first step in a larger project?
As you will have understood, we are talking here about a potential takeover of Netflix by Microsoft. Laura Martin, Needham Group Principal Analystwas recently asked about it by Yahoo Finance, and explained that Microsoft has, according to her, embarked on a long-term process that would culminate in a takeover proposal.
Microsoft would thus lack a service of this magnitude to face Disney and Amazon, and objectively would not be the best choice in terms of ad management, hence this idea of a long-term process that would appeal to Netflix. This analysis, which must be taken with huge tweezers because it only theorizes from knowledge of the market, also relies on Microsoft’s recent behavior, who offered himself Zenimax for $7.5 billionand who is currently seeking the approval of the authorities to integrate Activision-Blizzard-King.
Microsoft may have huge amounts of cash available to invest, but Netflix’s value is, at present, valued at around 100 billion of dollars. It should also be noted that, in the context where Microsoft eventually intends to offer itself Netflix, it is more than likely that the company will follow very carefully the overall situation of the SVOD offer, more tense than before.
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