In July 2022, Netflix announced a new partnership with tech giant Microsoft which was set to generate a fortune in advertising revenue on the online streaming service. However, after a few early hurdles, Netflix appears to be considering alternative options; namely, the streamer may look to run its planned operations using internal ad tech to cut out the middleman.
These new developments have come to light since Netflix has moved to retain high-profile expert advisors’ services. This suggests that Netflix are looking to fashion an internal framework for the proposed advertising technology.
It is still unconfirmed precisely what the outcome of the partnership will look like. Reportedly, Netflix and Microsoft’s current advertising deal is set for a two-year period, but the new developments could lead to Netflix building or buying its own tech.
It has also been reported (via Digiday) that Netflix has contracted Jon Whitticom, formerly the chief product officer at Comcast’s ad tech unit FreeWheel, as its “advertising platform advisor”. His responsibilities are believed to concern the “build or buy” prospects.
In January, Netflix representatives began seeking advice on how it can serve subscribers with the most appropriate advertising spot – technology Microsoft could have offered via its Xandr assets.
Sources that have requested to remain anonymous have interpreted these inquiries as indicative of Netflix’s goal to build its own server to reduce its dependence on Microsoft’s ad wares.
Another suggested option available to the streaming giant is for them to purchase ad tech assets. Although no evidence currently supports this as a considered avenue, it’s deemed “highly logical”, according to one corporate development source.
“Any kind of a build they want to go for would involve a lot of customization; I think this shows they’re serious about the ads business,” added another learned yet anonymous source via Digiday. “If you’re serious about it, you’ll want to in-house, particularly if you’re that size.”