Netflix has appointed Microsoft as its technology and sales partner on a new ad-supporting streaming tier.

This means Microsoft will be the exclusive server and seller of ads on Netflix, beating out leading candidates in the ad-serving space, such as Google and Comcast.

Both have competing streaming services, no doubt factoring into the decision.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Chief Operating Officer Greg Peters said of the partnership.

“More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

This move to an ad-supported tier comes after a disastrous year for the streaming leader. Netflix lost 200,000 subscribers in the March quarter, the first time its subscriber numbers were backwards in the company’s history.

The company signalled it expected to shed a further two million subscribers by the end of the June quarter.

To stop the bleed, Netflix have been forced to fire hundreds of staff, and have waded into the video games market.

An ad-supported tier is the next move, and many competitors have shown it can be a lucrative one.