US cable companies may finally be warming up to the idea of letting Netflix establish an app presence on set-top boxes, reports the Wall Street Journal. As we reported two weeks ago, no cable company had come remotely close to embracing Netflix’s long-standing advances, but it looks like Comcast Corp. and Suddenlink Communications are now negotiating with the popular streaming video service. Still, no deals have been struck yet.
Netflix already has relationships with two large cable TV providers, one being the UK’s Virgin Media, the other being Com Hem AB of Sweden. They allow Netflix to maintain an app on their set-top boxes that Netflix customers can easily access—without the need to unplug anything or switch to another device. That model is precisely what Netflix is pursuing stateside.
The benefit to Netflix would of course be an increased audience (the UK and Swedish companies put the Netflix brand in front of 3.5 million more pairs of eyeballs.) The benefits to cable companies include more programming options for new and existing customers, and the potential for more customers opting in to higher priced bandwidths. This is in addition to the additional brand mojo Netflix would bring to individual providers.
The drawbacks, cable companies point out, are the possibility of Netflix apps acting as “trojan horses” for smuggling redundant programming at lower prices, as well as Netflix’s condition that cable companies let it plug directly into broadband provider networks for better streaming. These hangups must be addressed before a cable industry-and-Netflix match made in heaven can be consummated.
SOURCE: Wall Street Journal