For years, Netflix has been portrayed as a threat to traditional cable TV service. Its growth has fueled a growing discussion about “cord-cutting,” the idea that the consumers would ditch their pricey cable service from the likes of Comcast, Cablevision and Time Warner Cable, and rely on Netflix’s vastly cheaper service to get movies and TV shows. But what if Netflix became part of your cable TV package?
That prospect has gained momentum following a Reuters report that Netflix Chief Executive Reed Hastings has been meeting with executives at some of the biggest cable companies about incorporating his streaming video service into existing cable TV plans. The idea, according to the report, would be to offer Netflix as an on-demand service to rival HBO and other premium cable channels. (HBO is owned by Time Warner, TIME’s parent company.)
Reuters points out that Hastings has been recently dropping hints about the possiblity, saying as recently as last week that such a move would be “the natural direction for us in the long term.”
For Netflix, adopting a cooperative — rather than antagonistic — relationship with the cable companies might very well be in its interest, especially as broadband service providers mull bandwidth limits. Netflix accounts for a huge chunk of the data that flows through broadband providers’ pipes to the home. At the same time, Netflix is aiming to bolster its own negotiating position by creating its own content. The service expects to have five original series by 2013, according to Bloomberg.
In short, with the rise of rival streaming services — such as those from Verizon, Amazon, and Blockbuster-Dish Network — Netflix may ultimately determine that its long-term interest is best served by working with the cable companies, rather than in opposition to them.