Netflix reworks Microsoft pact, lowers ad prices

Netflix is restructuring its advertising partnership with Microsoft for its lower-priced ad-supported subscription plan and is also cutting ad prices, the Wall Street Journal reported on Thursday.

The streaming company launched the $7-per-month plan with commercials last year in 12 markets, including the US, to attract more customers and selected Microsoft as its technology and sales partner for the offering, partly because it offered to pay a revenue guarantee, the report said.

Netflix is now reworking the agreement to reduce the revenue guarantee due to slowing growth of the ad tier, the report said, adding that company executives are frustrated that Microsoft has not sold more ad inventory.