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Cable Operators

Are Cable Ops Netflix’s Newest BFF?

3/12/2012 12:01 AM Eastern

The cable industry’s erstwhile
Public Enemy No. 1 on “cord-cutting” is now
looking to buddy up to
operators.

Netflix is in talks with
several large U.S. operators
about distributing
its $8 monthly on-demand
streaming service,
Reuters reported last
week. The company has
held exploratory discussions
with the unidentified
MSOs, aiming to
slot in its streamingvideo
service alongside
other premium entertainment
options — like
HBO or Showtime Networks.
Netflix declined
to comment on the reported
negotiations.

At least one operator may launch a Netflix trial
later this year, according to Reuters, which cited
anonymous sources.

But not every provider would be inclined to
team up with Netflix.

Comcast, for one, has no
plans to sell its customers Netflix
subscriptions, according
to a spokeswoman. For one
thing, Comcast is now pushing
its own Netflix-like service,
Streampix, which will
offer a collection of thousands
of older TV shows and movies
as a bonus for subscribers
of certain bundles or for $4.99
per month.

Separately, Verizon Communications
is teaming up
with Coinstar’s Redbox to develop
a would-be Netflix killer
that melds streaming Internet
video with access to Redbox
DVD kiosks.

But for other MSOs, offering Netflix as a premium
VOD option could be attractive. Instead
of getting cut out of the equation, an operator
would presumably get an incremental share of
Netflix subscription revenue.

Some operators have already shown an openness
to over-the-top video content. For example,
Charter Communications — instead of trying
to contain everything in an operator-controlled
“experience” like Comcast — last fall began incorporating
search results for video content
from Netflix, Hulu and Amazon. Charter either
links to the third-party services or embeds a video
player in its own website.

Right now, no money is changing hands between
Charter and the Web-video providers.
A Charter spokeswoman declined to confi rm
whether the MSO was considering offering Netflix to subscribers.

One stumbling block is that Netflix would
have to renegotiate licensing deals with Hollywood
studios and programmers, because many
existing contracts bar Netflix from offering content
through pay TV providers.

September