Boom! Netflix Coming To US Cable Operators This Quarter

Dave Zatz —  April 21, 2014


While investor calls generally bore us, Netflix dropped quite the bombshell this afternoon:

This quarter we will launch the first MVPD integrations in the U.S. As we did in Europe, we will start with U.S. MVPDs that use the TiVo set-top box and try to extend to non-TiVo devices after that. From an MVPD point-of-view, they would rather have consumers use Netflix through the MVPD box and remote control than have consumers become accustomed to watching video from a smart TV or Internet TV device remote control.

So many possible angles to explore here… RCN is arguably TiVo’s most aggressive US partner, one that previously expressed interest in offering Netflix, and Suddenlink recently polled subscribers regarding the possibility of a Netflix addition. Then we’ve got the whole peering dealio with cable/broadband providers like Comcast to ponder. And, of course, finally is the elephant-in-the-room premise that Netflix had been a cable competitor (although many of us here subscribe to both). Yowza!

13 responses to Boom! Netflix Coming To US Cable Operators This Quarter

  1. I absolutely believe the initial rollout will see zero changes to Netflix subscriptions… but I wonder if down the road they’d bundle it or even offer cable operators commissions for enrolling folks and/or integrated billing – like an inverse EPIX. The permutations make my head ache. In a good way. :)

    Speaking of Netflix subscriptions, new customers will be subject to $1-2 higher rates come summer… guess I better re-up as soon as Orange in the new Black S2 hits in June.

    Lastly, in regards to Netflix on Amazon Fire TV: “we expect to support voice search later this year”

  2. As you say, will be interesting to see who jumps, but I’m not convinced this means much *yet*. I presume Comcast et al will fight this far more than Mom & Pop cable.

    If Alan Wolk is right, then only about 10% of the 120M US Households get their TV OTA, meaning at most 12M subscribers for Netflix there even if all of them subscribed which obviously isn’t right. So the majority of Netflix ~35M suscribers in the US must be coming from people who also pay for TV (cable, telco, satellite).

    Given my own experience with the WAF of ANY device on an alternate input, I can easily imagine that there are a *lot* of people who might subscribe to Netflix if it were easy to get access to it from their cable STB. So I assume this is a win for Netflix? Like others I’d probably prefer to just let the old system slowly strangle itself but hey, maybe they’re smarter than we give them credit for.

  3. “Speaking of Netflix subscriptions, new customers will be subject to $1-2 higher rates come summer”

    The Comcast “first-mile” tax…

  4. I bet many small cablecos will be interested in this, but nobody should get their hopes up that Comcast or Verizon will jump on board. A lot of the smaller guys would rather not have to deal with the video business at all anymore, but the big guys continue to invest in content rights and won’t want to include Netflix alongside their own offerings.

  5. Way to bring me down, Mari, ;) But, yeah, good point. The more I study/follow RCN and others, the more I’ve become aware of these distinctions. (And the ACA is far more interesting than the NCTA – a whole separate set of issues, concerns, battles.) I wonder how long the smaller operators can/will survive independently before being subsumed Borg-like.

  6. “Speaking of Netflix subscriptions, new customers will be subject to $1-2 higher rates come summer”

    Seriously, they’re claiming this as ‘buying more programming’, but does anyone really doubt this is about paying off Comcast for “first-mile” access? Given the amount of bits they ship, the cost they’re paying Comcast is almost definitely not negligible.

    Oddly, if the grandfathering lasts a long time, this could be good for them, as it would cut down on churn. We normally cut Netflix during the NBA playoffs, but this would be a potential reason not to.

    OTOH, I’m getting so tired of the lousy PQ since FIOS started throttling in order to get the same “first-mile” tax as Comcast, (or maybe to just promote their own VOD instead), and watching enough Amazon Prime, that I’m thinking of just canceling anyway and not coming back. For PQ reasons, I’d much rather watch my second choice on Prime than my first choice on Netflix.

    (I figure we need to average around 4 movies a month to make Netflix worthwhile, and when we’re not deep-diving some old teevee series, it’s often hard to meet that quota. At $10/month, that’s worth 3 Amazon a-la-carte selections. And if we want to deep-dive a series, we can always come back for a month at a time. Decisions, decisions.)

  7. As far as I can tell, what this ACTUALLY means is that cable companies that distribute TiVo hardware to their subscribers (ie, very few of them) will allow the Netflix app to run on that hardware. They aren’t bundling Netflix, or offering a discount on Netflix subscriptions, or really talking about Netflix in any way. They just don’t want their subscribers to buy a Roku, because that makes them more likely to cancel their cable subscription.

    Please do correct me if I’m wrong.

  8. Agreed, but I’d call it Phase 1. Will be interesting to see how/if it evolves.

  9. I guess my point was that this phase1 isn’t really a “boom, bombshell, wowza” kind of thing, because TiVo share of the cable STB market is tiny.

    If they really put netflix apps on cable company branded STBs and deploy regionwide, that would be a neat plus.

  10. In my mind, it’s still a big deal even given limited initial penetration. Tho Mari’s point is solid – the strategies of the smaller providers often differ from the larger ones, where it’d be more earth shattering. But Netflix did indicate other platforms after TiVo… can’t tell you if the deals have been signed or it’s just wishful thinking.

  11. Very smart. People who would never purchase a Roku or WDTV Live (or know what to do with them) are going to love this.

    I know my mom will.

  12. The one thing I’ll say about a Netflix $9.99 price, should it come to pass, is that would be EXACTLY what I’m paying for HBO. Which does bring the question to mind of whether the two are equal in value to me or not, which is something I didn’t think about before.

  13. As other’s have speculated, could be interesting if the cableco and Netflix work out a deal to include Netflix in their monthly rates. Would be a challenge to Dish/Blockbuster and Verizon/RedBox. In my area Suddenlink is very big in the tourist/2nd home areas of extreme Northern CA, Lake Tahoe/Truckee area, and Monterrey CA. It might help Suddenlink increase their Tivo/Tivo Mini deployment if customers know they can also use their current Netflix account to watch movies/shows.