Netflix looking to partner with MSOs for network
“The Netflix Network?” It may be coming to a cable channel lineup near you. Netflix CEO Reed Hastings met with some of the largest U.S. cable companies in recent weeks to discuss adding the online movie streaming service to their cable offerings, according to Reuters. Indeed, Hastings has hinted at investor conferences recently about the possibility of Netflix one day being a cable channel rival to premium networks like HBO.
“It’s not in the short term, but it’s in the natural direction for us in the long term,” said Hastings, speaking at an investor conference last week. “Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO.”
The talks could lead to Netflix becoming available as another VOD option for cable subscribers via set-top boxes. If a partnership came to fruition, a cable operator might offer Netflix as an additional option added onto a subscriber’s cable bill, said the story.
Reuters said people familiar with the talks said Hastings has already met with senior cable execs to discuss how such a partnership might work. At least one cable operator could experiment with offering Netflix by the end of the year, said a Reuters source.
While Netflix offers mainly old TV shows and movies through its Web streaming service, it had been seen as a threat by some cable operators and cable networks worried the $7.99 a month service would lead to customers doing more cord cutting.
Meanwhile, Comcast last month launched its own online video service for subscribers called Streampix. It directly competes with Netflix. Streampix is an online VOD subscription service featuring thousands of TV re-runs and older movies. It allows users to watch content on televisions and Internet-connected digital devices like smartphones. It will be free to customers who subscribe to Comcast’s video, Internet and phone service, and cost $5 to those who get only TV from the company.
Streampix — which has TV shows like “30 Rock” and “Grey’s Anatomy” and movies such as “Brokeback Mountain” and “Ocean’s Eleven” so far doesn’t come close to the more than 14,000 titles available to stream from Netflix. Netflix also has exclusive deals for TV shows like “Mad Men” and independent films like last year’s Ryan Gosling drama “Drive.”
This new service is separate from Comcast’s Xfinity On Demand, which offers more recent movies available to consumers on a per-title basis.
Netflix also faces more competition from incumbents including Verizon Communications’ JV with Redbox due later this year.
RBR-TVBR observation: Any partnership with Netflix would be a big switch for the cable industry, however, some of the major media companies do like the licensing dollars Netflix is paying to run their shows. If a deal is reached, Netflix would have sign new licensing deals with programmers since existing contracts probably don’t allow Netflix to stream their shows via a set-top box.