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Netflix teams up with Microsoft for ad-version of their streaming service

Graham Watson

14th July 2022

Netflix and Microsoft have teamed up to offer a cheaper version of Netflix, complete with adverts, in an attempt to stem a loss of subscribers.

In April 2022, shares in Netflix slumped after it reported its first subscriber loss in more than a decade

It's an interesting move - it reflects a response to the cost of living crisis which is cutting household disposable incomes and thus income elasticity of demand is relevant here - but it also risks diluting the brand, and might see subscribers opt for the cheaper rather than the premium version, adversely affecting profit margins.

We've added a little more comment here from Bloomberg

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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