In a Q2 letter to its shareholders, the company revealed that the plan will test in a handful of its markets where “advertising spend is significant.”
“We’ll likely start in a handful of markets where advertising spend is significant,” the letter shared per Variety. “Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering.
So, our advertising business in a few years will likely look quite different than what it looks like on day one.”
News of the soon-to-launch plan was confirmed in April, after Netflix confirmed a staggering loss of 200,000 subscribers and attempts to crackdown on password sharing.
While a pricing is yet to be confirmed for the newly launched plan, the service says it will offer cheaper subscription. It is unlikely that its Nigerian market will be explored in the early ad-supported launch.
The news also follows reports that Netflix signed an exclusive deal with Microsoft to serve as its advertising partner.
“Microsoft is investing heavily to expand their multibillion [dollar] advertising business into premium television video, and we are thrilled to be working with such a strong global partner,” the letter revealed.
“We’re excited by the opportunity given the combination of our very engaged audience and high-quality content, which we think will attract premium CPMs [cost per thousand impressions] from brand advertisers.”
According to Ted Sarandos, co-CEO and chief content officer, Netflix is currently in talks with some of its content providers on rights issues ahead of the ad-supported launch.