Netflix will introduce a new subscription model, under a new plan, at the end of the year or during the next training cycle, where many will be able to subscribe for a small fee but will have to watch ads.
Netflix is facing a challenge that has not existed in recent years, which is competition, as more and more services are entering the market that may bring millions in losses and more subscribers to Netflix in the coming cycles.
Their first decision, in addition to the fight for preventing shared accounts, is to collaborate with Microsoft to access their advertising market so they can leverage it in their new ad-supported subscription model.
An analyst sees this Microsoft advertising deal as having hidden intentions, with Microsoft’s approach to potentially acquiring Netflix in the future.
Laura Martin, a senior analyst at Needham, spoke to Yahoo Finance about the deal, suggesting that there may be larger ambitions at play, in terms of Netflix’s ability to establish a friendly relationship with Microsoft and thus open the door to an actual acquisition.
Martin commented that the advertising deal surprised many and it is truly intriguing that Netflix is nearing the only company in North America that could end up acquiring a company valued at over $100 billion.
Martin says, “Netflix may be looking for an exit strategy.” “Netflix is trying to approach Microsoft in the hopes that after Microsoft completes its acquisition of Activision, it will then turn around and buy Netflix.”
While this is speculation from analysts, there are some interesting points to consider. If Microsoft were to make this purchase, it would gain an internal movie division allowing for the integration of its key video game licenses with TV shows or movies.
It could also allow Microsoft another avenue to stream Xbox games by offering a Netflix Games section.
