Netflix is reportedly in talks with US cable providers to carry its streaming service on their cable boxes. It could make sense despite the obvious poacher/gamekeeper comparisons.
The talks follow Netflix making a deal to be carried by Virgin Cable, the main cable operator in the United Kingdom (though second in the pay-TV stakes to a satellite conmpany.) That agreement, which is currently undergoing user testing, takes advantage of Virgin’s TiVo customers already having access to a special 10Mbps Internet link (separate to any broadband connection) used for on-demand content. Netflix is simply presented as an “app” on the box, similar to the way it works on games consoles, and customers must deal directly with Netflix to get access via a user name and password.
It seems Netflix is looking for a similar set-up with US operators, rather than having the Netflix subscription be collected as part of the monthly cable fee. The logic is that it helps both sides: people will be more likely to subscribe to Netflix if they have an easy way to access it on a TV, and people will be more likely to keep their cable subscription if they get added features such as Netflix. Of course, both those theories make much more sense with people who don’t have a games console hooked up to their TV, and particularly those who don’t have any interest in getting extra boxes in their living rooms or hooking up computers to TV sets.
It’s the lack of a dedicated “on demand” internet link that could both help and hinder the possibilities of the deal working out in the US. It seems the cable operators like the idea of “carrying” Netflix because it will encourage customers to pay for fast broadband packages to make sure they get a reliable stream. It’s also only going to really appeal to those willing to pay extra for content, rather than using cash for Netflix in place of a premium cable subscription.
However, Netflix is said to be insisting that it be given access to the cable firms’ broadband networks so that it can measure the available bandwidth and automatically deliver the best quality stream that is still reliable and won’t have freezes or other glitches. The cable firms are said to be worried that allowing such access could set a precedent and encourage other online firms, particularly those streaming videos, to demand similar treatment.