Netflix Through Your Cable Box? A Pact Could Create New Complications

If Netflix Gets to Have It Both Ways, Networks May Want the Same

By Published on .

Netflix may be attempting to secure a surprisingly traditional connection to your TV: through the cable box.

But if Comcast, Cablevision or Time Warner Cable started offering the streaming-video giant's services, it could drastically alter the relationships between cable companies and the traditional networks they already carry.

Reuters reported Tuesday night that Netflix CEO Reed Hastings has met with major cable companies to talk about carrying Netflix content, perhaps as an on-demand option.

Netflix on Wednesday morning declined to comment on the Reuters report. But one cable operator said that carrying Netflix would not make sense for it right now.

While a deal of that kind might alleviate Netflix's threat to cable subscriptions by making it an asset to cable providers as well, it could also open up a new set of questions.

"If Netflix is able to sell both within cable and direct-to-consumer, other networks will also want this opportunity," said Tony Wible, analyst at Janney Capital Markets. "HBO may turn around and say it will give viewers its content at a fraction of what they have to pay for the network on their cable bill."

That could challenge cable operators' relationships with the networks.

Netflix has been slowly revamping its image to appear more like a TV network than an online video store. The company is rolling out original programming and late last year said that HBO was its most-feared competitor.

In the process, Netflix has made itself seem more benign to cable operators, Mr. Wible said. "Netflix realizes it needs cable operators," he said. "They have the pipes in the ground."

Netflix has also been challenged in recent months as new players have entered the streaming market, most recently with Comcast introducing Streampix and Verizon Communications and Redbox announcing a partnership for a streaming service. While none of these rivals pose a real threat yet to Netflix's existence, they complicate its long-term foothold with consumers.

Most Popular
In this article: