The Big Story: Why Netflix Picked Microsoft

The Big Story podcast

Stranger things have happened than Netflix going AVOD.

Netflix, which has long prided itself on an ad-free experience, is creating this upside-down version of its service to reduce churn and attract more price-conscious subscribers.

Microsoft, not known for its video ad tech chops, ended up winning the deal, surprising the ad tech world. Why Microsoft? Well, not only did Microsoft scoop up Xandr in December, which had already built video chops for WarnerMedia when it was still part of that conglomerate, but it’s the only video ad tech player that’s not a full-on frenemy. Google and Comcast, while strong in video ad tech, also run streaming services of their own.

In this case, Netflix is actually the one encroaching on Microsoft’s turf by acquiring its way into the video gaming space. TBD on whether that expansion continues.

We discuss why the deal makes sense and what might happen in the lead-up to Netflix’s 2023 AVOD launch.

Then, one alternative to third-party cookies, seller-defined audiences, has gained strong support from publishers, but buyers aren’t biting. Publishers are still waiting on the buy side to test the solution and refine it.

Many factors are contributing to the slow takeoff of seller-defined audiences, from the abundance of third-party cookies (they ain’t dead on Chrome yet) to the spec’s complexity, its lack of standardization (by design) and lack of integration by ad tech vendors to make it easily available to buyers.

We speculate on a possible future where seller-defined audiences take off – and one in which it languishes.


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