Netflix’s announcement that it had selected Microsoft as its global advertising technology and sales partner came as a shock to the media industry, but the decision could be the first step in a larger strategic battle plan for the company.
Since Netflix announced in April that it would be introducing an ad-supported tier, many assumed that the existing infrastructure of major players such as Google, Amazon, Comcast and Roku would be natural fits for the company. Microsoft, while boasting a $10 billion advertising business and the ad-support system company Xandr, is considered a smaller player by comparison. Yet the potential synergies between the two companies and the lack of direct competition may pave the way for even larger moves ahead.