As if it weren’t already easy enough to watch movies on Netflix, the popular movie rental service, is said to be in talks with top U.S. cable operators with regards to allowing its online service to appear as an app on set-top devices.
It’s a tough nut to crack, but Comcast, Time Warner Cable, AT&T and Verizon are said to be considering Netflix’s offering. The deal will allow cable subscribers to watch programming on demand, older shows that are no longer available in networks offered by the cable operator, and even serve as the go-to place for network blackouts.
New set-top boxes these days are now internet-capable, and so having apps such as Netflix on board will allow subscribers to be able to enjoy more programs when they want to.
While it sounds like a great development for movie watchers, there’s no guarantee the deal will go through. There’s still a handful of obstacles standing between Netflix and set-top boxes, as Mellisa Tolentino outlines in her coverage of the news this morning:
3 Reasons Cable Providers may Block Netflix Deal
- Double Duty
According to sources, cable service providers still worry that allowing a Netflix app on their set-top boxes would give the streaming service a great leverage in. There’s a huge chance that Netflix will sell pay-TV subscriptions that the cable provider itself offers.
- Direct Competition
Another reason is that it might entice cable subscribers to drop their subscription when they see that they can watch almost all of their favorite shows on Netflix. If this happens, cable subscriptions will plummet and subscribers could just opt for a Roku, or an Apple TV, or any other internet-connected set-top box in place of a cable subscription.
On the other side of this coin, however, cable operators could use such partnerships to their advantage. Having direct access to Netflix could be a perk that attracts more users, in fact boosting subscribers to their cable offerings.
- Quality Streaming Issues
The third reason, and probably the biggest snag keeping cable operators from signing a deal with Netflix is that the streaming service wants cable operators to use a technology that would boost the quality of streaming videos. The technology is part of the Open Connect program that allows ISPs to directly connect to their networks for free. Netflix wants to use its own servers and directly connect into broadband providers’ networks, as the company believes it will be crucial in delivering the best quality of programs to viewers.
It’s all about the viewers
Indeed, the cable providers may have reservations in granting such a partnership to Netflix, as it competes with many of their own efforts and could cause problems with rival streaming services, some of which already have deals with cable providers.
Nevertheless, Netflix Chief Financial Officer David Wells said during a recent conference call that they would “love to reduce the friction to the end consumer” by being available on cable set-top boxes, but in order to do that, the cable providers need “to decide how much of a competitor they view us as or a complement.”