April 28, 2014
Netflix To Add Cable Channel To Platform
Enid Burns for redOrbit.com - Your Universe Online
Netflix has inked a few more deals with cable operators. This time it's not to get a faster pipe like the deal the OTT provider made with Comcast in February. This time Netflix plans to provide content via an app on TiVo DVRs through three smaller cable operators.Content is expected to become available as soon as next week from three cable operators: RCN Telecom Services, Atlantic Broadband and Grande Communications, Variety reports. The three MSOs have a relatively small footprint, compared to larger providers such as Comcast or Time Warner Cable. Variety reports that RCN has about 333,000 video subscriptions; Atlantic Broadband has 230,000 customers and Grande Servers has about 140,000 customers. "The MSOs are tiny compared with giants like Comcast or Time Warner Cable, but the deals show that at least some in the cable biz are receptive to Netflix’s overtures," wrote Variety's New York digital editor Todd Spangler.
“Netflix is good for us because it’s fantastic for our customers. It’s delivering the best possible customer experience,” said David Isenberg, chief marketing and strategy officer for Atlantic Broadband, quoted in Variety. “The perception in the media is that Netflix is a competitor to cable. That’s not really the case. The content libraries are tremendously complementary — they fit hand in glove.”
The deal covers roughly 500,000 of the three cable providers' existing subscribers, the Washington Post reports. There is potential for that number to grow, as more subscribers sign up for the service.
During Netflix' first-quarter earnings, released on Monday, Netflix floated the deal by saying it would launch its first pay-TV integration in the US. Variety reports that similar deals with European providers including Virgin Media in the UK have already been set up.
Previous experiments have taken place between Netflix with pay-TV providers in Denmark, Sweden and the United Kingdom, the Washington Post reports.
To access the Netflix App on TiVo, RCN, Atlantic Broadband and Grande customers will still need a Netflix subscription. "If they don’t, they can sign up directly on the TiVo boxes in a three-step process, to receive the standard one-month-free offer, but eventually they would have to set up an account with Netflix," wrote Spangler.
While the content will be available via the DVR, Atlantic Broadband plans to add Netflix as a channel on its grid guide on TiVo set-tops. The channel will appear next to other premium channels. "Watching Netflix is as easy as picking up the remote and changing the channel," Atlantic Broadband's Isenberg said, in Variety.
For Netflix, the move makes Netflix more akin to a premium cable channel such as HBO than a cable operator such as Comcast.
“The entire cable television market is in the process off reinventing itself,” Jeff Kagan, an independent telecom analyst, told the Washington Post. “Watching television on TV used to be the entire pie. Now it’s just one slice of it.”
Whether this is progress or not, Wired reports that this deal marks "yet another sign that the Internet is eating traditional television."
While similar deals have been tested elsewhere, the Netflix deal with these three cable providers marks a sea change in the industry.
"For Netflix — a main way that people stream TV shows and movies over the internet — this deal is the first of its kind. It’s also a definitive sign that traditional cable companies, particularly small ones, are realizing they need to bridge the gap with internet TV in order to survive. Under the agreement, cable companies RCN, Grande Communications, and Atlantic Broadband will offer access to the Netflix service straight from their TV set-top boxes," wrote Wired's Issie Lapowsky.