Netflix x Microsoft agreement: an analyst analyzes the acquisition of the SVOD platform | xbox one

You may not have missed it in the tech news: Microsoft just announced a strategic partnership with Netflix to develop a new type of consumer subscription, including advertising. The Redmond firm oversees the platform that will broadcast these future ads. According to analyst Laura Martín, this agreement would rather hide a much more ambitious approach.

Acquisition in sight?

It was July 13. Satya Nadella indicated on his Twitter account that Netflix had chosen “Microsoft as a commercial and advertising technology partner.” The SVOD platform has made this merger with the aim of developing a new interface that allows advertisers to meddle in the heart of the Netflix catalog.

Behind this maneuver, an observation: Netflix is ​​struggling to retain its subscribers as prices increase over the years and competition, with platforms such as Disney +, Paramount + or Hulu, is eating market share. Exclusivity is no longer a sufficient argument, Netflix fights back and wants to launch a subscription at a lower price, based on advertising.

“If you want the ad-free option, that will always be possible. If you prefer to pay less and are tolerant of ads, there will also be an offer for you”, are the words of Reed Hastings, CEO of Netflix. In fact, the platform cannot manage this decisive turning point alone and has chosen the commercial merger with Microsoft to develop. According to analyst Laura Martin, that is not the main objective of this agreement.

A specialist in the financial movements of the platform, Mrs. Martín affirms that in the end, “it could be that Netflix is ​​looking for a way out.” An exit that means “buy back” according to the Needham analyst for an interview with Yahoo Finance. According to her, the fact of choosing Microsoft, quite new in the field of advertising, is a choice contrary to reason and would aim to remain under the supervision of the Redmond firm, before a possible takeover bid.

Netflix is ​​trying to get closer to Microsoft in the hope that after Microsoft digests its acquisition of Activision, it will eventually turn around and buy Netflix. Netflix announced three months ago on its earnings conference call that it was getting involved in advertising; has not yet hired an advertising sales manager. The idea that there is nobody in the empire who is an expert in advertising, when they have chosen an advertising partner for the technological part, is to do things backwards.

Laura Martin semble donc pas croire à un rapprochement dans le but de développer Netflix, alors meme que l’un de ses principals declaré dans le communiqué de presse de Microsoft que malgré l’accord, «il était encore tôt et il reste beaucoup to be done.” Viewed from this angle, this partnership doesn’t seem viable as it stands and, in fact, might require an acquisition of the SVOD platform by Microsoft, as the two companies have always been close.

You Documentary Xbox – Power Up He also likes to remind himself that without the Xbox 360, Netflix might not have been as successful as we’ve known for several years. In the midst of change, the movie rental company had chosen Xbox as its preferred partner, before Microsoft was inspired by it to develop its xbox game pass. Thus, a buyback of one for the other would effectively be a consistent decision between two long-time collaborators who might have much to gain from it.

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