Will U.S. Cable Companies Embrace Netflix?By: Chris Crum - September 30, 2013
Netflix has been achieving all kinds of new milestones. Its original shows were able to garner a total of fourteen nominations (while also managing to win a few), marking the historical entrance of online video into the television awards.
Earlier this month, a deal with Virgin Media was announced marking the first time a cable company would offer Netflix to its users. Last week, news emerged of a similar deal between Netflix and Swedish cable provider Com Hem. Like with the Virgin Media deal, Com Hem will offer Netflix through its TiVo boxes.
These deals might just be the beginning of something much larger for Netflix, however, as the company has also expressed interest in working with cable providers in its homeland of the United States.
Netflix chief financial officer David Wells said at Goldman Sachs’ Communacopia investment conference in New York that the company is open to deals with U.S. pay TV providers, but hasn’t reached any agreements in the States thus far.
“It’s up to the MVPDs (multichannel video programming distributors) to decide how much of a competitor we are or a complement,” Wells said.
That is the ultimate question. Is Netflix a competitor or a complement? In reality, the case could be made for either. Some people are happy to get by without a cable provider and stick with Netflix, and perhaps other web-based options to complement it. Obviously there are plenty of others who continue to use both cable (or satellite) and Netflix.
As Netflix pushes forward with its original programming, it’s looking more and more like an HBO than a cable provider, and HBO is certainly considered a complement as opposed to a competitor (though many – including its own CFO – would like to see HBO go for more of a Netflix-like standalone model).
Netflix intends to double its original content investment, and is now offering its users a higher quality video experience, so far, while keeping prices nice and low.
Image: Netflix (YouTube)