Netflix in Negotiations with Cable Television Providers
Are you using Netflix? Netflix is in the initial stages of negotiating with U.S. cable TV providers to make its online streaming video service available as an app on their set-top boxes according to the Wall Street Journal. No deal appears to be imminent, however, Netflix did recently announce a similar agreement with U.K. cable operator Virgin Media.
This would be a landmark deal bridging the internet entertainment and television worlds together, as Netflix and cable operators are considered rivals in many ways. Lots of people have become frustrated with floating the high cost of cable bills each month, and have already been turning to services like Netflix as a cheaper and more attractive option for on-demand TV programming. So Internet providers like Comcast, Timer Warner Cable, AT&T and Verizon Communication have been hesitant to integrate with Netflix in fear of losing views from their own video services and the extra bandwidth needed to take on Netflix’s heavy usage. But as technology and Internet speeds are improving, cable companies are warming up to the idea since they believe Netflix users are more likely to buy expensive broadband connections and other enhancements. Plus, if you can’t beat them, you might as well join them. Some operators could also look to take advantage of Netflix’s library as an alternative location to host older programming. As of now, customers can stream Netflix on their televisions with an Internet-connected TV via game consoles like the PS3, Xbox or devices like the Apple TV box. But if Netflix can get on cable boxes directly, too, this would open itself up to a much wider audience.
Netflix has also taken to producing its own series of shows, too, which many big time actors and directors like Kevin Spacey believe to be the future of how we’ll consume entertainment saying people want to watch “what they want, when they want it, in the form they want it in, at a reasonable price, and they’ll more likely pay for it rather than steal it.”
Spacey believes that any differentiation we have between platforms will disappear:
If you watch a TV show on your iPad is it no longer a TV show? The device and length are irrelevant … The labels are useless … For kids growing up now there’s no difference watching Avatar on an iPad or watching YouTube on a TV and watching Game Of Thrones on their computer. It’s all content. It’s all story.
This could pose a concern for the cable operators, though, who also worry that Netflix could eventually use the app as a “Trojan Horse” to sell pay-per-movies or other services that would directly compete with an operator’s offerings. Knowing the potential snag in negotiations, at a recent investor conference, Netflix CFO David Wells said the company would “love to reduce the friction to the end consumer” by making itself available on cable set-top boxes. But it’s ultimately up to pay-TV operators, he said, “to decide how much of a competitor they view us as or a complement.”
Would you like to be able to use Netflix on your cable TV?