Netflix released its quarterly earnings report today along with a letter to shareholders. Among the topics discussed in the letter is Netflix’s presences (and lack thereof) on set-top boxes from from cable providers.
This has been a big topic in the news for the last couple weeks with reports coming out saying that Netflix has been in talks with providers in the U.S. following its Virgin Media deal in the UK.
While Netflix clearly wants to expand with similar deals with other providers, the company doesn’t expect its cable presence to come close to its Internet set-top box presence any time soon. Here is what CEO Reed Hastings and CFO David Wells said about the matter in the letter:
We launched with Virgin Media, the UK’s leading cable company, a world first: Netflix on a major cable set-top box. It is rolling out over this quarter to Virgin Media’s subscribers. The integration of search and suggestions between broadband and cable is great for customers, and we want this superior experience to help Virgin Media gain market share in the UK.
Cable operators like Virgin Media believe that by enabling their subscribers to do more with their cable set-top and remote, they can increase satisfaction, relative to their subscribers using a separate Internet set-top box or smart TV to enjoy Netflix. We are open to more of these integrations with cable set-tops around the world, but given the fragmented technology footprints, we think it will be many years before cable set-top boxes match Internet set-top boxes for Netflix streaming volume. As a general rule, we’re happy to support devices from other video providers as long as we get application placement commensurate with our popularity.
Meanwhile, the company is seeing some major growth from other devices. In the letter, the two mention that tablets and phones are “rapidly growing as Netflix viewing platforms,” and that smart TVs, and Internet TV devices like AppleTV, Roku and Chromecast are contributors.
Image: Netflix (YouTube)
