Seeking Alpha

Netflix in negotiations to provide service to cable operators

  • Netflix (NFLX) is reportedly in talks with Comcast (CMCSA), Time Warner Cable (TWC), Suddenlink Communications and other cable TV providers to make its service available to their customers via an app on their set-top boxes. However, one snag is that Netflix wants its potential partners to use its technology.
  • Talks are most advanced with regional operators and smaller providers that use TiVo's (TIVO) devices. Any deals would add to two that Netflix has in Europe.
  • The negotiations indicate how telecom / cable TV providers could use Netflix as a way to draw in and keep subscribers rather than just viewing the company as a threat.
Comments (7)
  • This isn't new news? Same names were mentioned a few weeks back. And even back in March 2012?
    http://bit.ly/1bRqk87
    14 Oct 2013, 09:05 AM Reply Like
  • it has to be new news...otherwise the stock would not be soaring almost $17
    14 Oct 2013, 12:24 PM Reply Like
  • This is a much better deal for NFLX than for the greedy cable companies. NFLX streaming is about $10/month vs a $100+/month bill for cable. If anything, this greatly promotes NFLX service and if people find themselves uses NFLX streaming over their cable box enough, they may have the sense to cut the cable.
    14 Oct 2013, 09:08 AM Reply Like
  • Can't help but feel slightly disappointed as this helps the cable guys probably more than NFLX, also makes me think NFLX have come to a standstill on subscriber growth. I liked the image of streaming being a game changer. Also how much goes to the cable guys, not a big cake to cut from at $8/month?
    14 Oct 2013, 10:49 AM Reply Like
  • Good point Karlos. I figure that any deal with a cable provider could include their putting pressure on Netflix to limit its content.
    14 Oct 2013, 11:09 AM Reply Like
  • if a deal is struck it means more revenue and this compagny is valued uniquely on revenues so its a big deal for them in the short run. When profits will become important, I am with you that it wont help them much since they will have to slice the pie with cable...
    14 Oct 2013, 11:25 AM Reply Like
  • A deal struck may not necessarily mean more revenues. When cable first started, small time channels like ESPN (when it first started, ESPN was tiny and many people expected it to fail) actually had to pay cable companies to be hosted on their box. Most cable revenue came from this at first, not from the consumer. As these channels got more and more popular, the pendulum swung and the content providers had the ability to charge cable companies; which has continued to jack up the consumer's cable bills. It is not out of the realm of possibility that NFLX ends up agreeing to a deal in which THEY pay the cable companies to be hosted on their box at first, considering that most people view netflix as a cable company's worst enemy. Either way, we won't know because NFLX won't announce the details of any deal that does come to fruition.

     

    What I wonder, is if the appearance of Netflix on a cable box will make it become it's own channel, or if it will appear as a streaming app? It could be moving to become another HBO, with the online streaming segment that is now considered the future of NFLX simply becoming somewhat akin to HBO GO.
    14 Oct 2013, 02:44 PM Reply Like
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