Privacy, Independence And Gaming – Why Netflix Picked Microsoft As
News that Netflix had anointed Microsoft as its partner to redefine the future of ad-funded TV rocked the many adtech companies courting the streamer this week. The Drum explores why Netflix can chill now it has a heavyweight partner to jumpstart its dramatic U-turn into a more traditional advertising model.
With the likes of Comcast-owned Freewheel, Roku and Google all pegged as potential partners, Microsoft may have been a bit of a dark horse. However, with its recent acquisition of Xandr, its dedication to privacy and its independence from other video steamers, Microsoft appears to have ticked numerous boxes.
Hunter Terry, vice-president of solutions consulting and CTV commercial lead at Lotame, was one of the few who wasn’t shocked Netflix picked Microsoft over Comcast or “everybody’s frenemy” Google.
Why did Netflix pick Microsoft? / Adobe
“As a sales partner, Microsoft has the expertise and connections with all the buyers as it has monetized its own significant web and search properties over the past few decades,” Terry says.
Microsoft’s recent acquisition of Xandr from AT&T was integral. Jeff Sue, general manager of Americas at Mintegral, says Xandr will “uniquely help monetize CTV and console, so it is in an excellent position to deliver brand-safe advertising.”
Xandr is a modular ad stack platform that serves both the sell and buy-side. It’s thought Microsoft brought Xandr to help its ad business in the post-cookie era. AT&T previously acquired Xandr (formally AppNexus) in 2018 to support the launch of its ad-funded video-on-demand (VOD) platforms. Its eventual sale perhaps shows how much success it had – but Xandr’s getting another swing at this mission now for Netflix.
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Xandr’s first-party data-led approach is an ideal fit with Netflix’s privacy-focused business model. According to Greg Kahn, chief executive officer of GK Digital Ventures: “Netflix has waited many years to launch an advertising tier, in part to maintain a premium customer viewing experience.”
Among its competitors Microsoft is perceived to have a stronger dedication to privacy through its Parakeet initiative, Kahn says. “It wants to be vigilant to protect customer data, particularly in markets where government scrutiny is growing.”
Without a tie to another major video streaming platform, Microsoft also has no direct conflict of interest – unlike Comcast, which owns Peacock, or Google, which…
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