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In the News

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

Graham Watson

14th July 2022

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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

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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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