Netflix Is Coming After Your Cable Box

Streaming service is now available to cable subscribers abroad but will face challenges working out similar deals in the U.S.

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Via Netflix

Netflix has found a surprising ally as it tries to boost its subscriber base: cable operators. Firms that stand to be disrupted by Netflix’s distribution model are now working out deals to make the streaming service directly available through their own boxes.

Earlier this month Netflix inked a deal with U.K.-based Virgin Media to bring the streaming service to the cable operator’s 1.7 million subscribers who have TiVo set-top boxes. A similar deal was announced last week in Sweden with Com Hem, which is the country’s largest cable provider with almost 1.8 million subscribers.

While both deals still require viewers to purchase a Netflix subscription, they open the door for an increased cooperation between traditional cable operators and Internet-based streaming services. Users will now be able to seamlessly switch between watching cable and viewing content on demand via Netflix within the set-top-box interface. Currently, users typically have to switch between a cable box and other Netflix-enabled devices, like Roku gadgets or video-game consoles.

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Netflix says it would like to work out similar deals in the U.S. Last week chief financial officer David Wells said American cable operators have had an “open offer” for two years to include the technology as part of their offerings. “We are always in discussions to expand the universe of devices that run Netflix, and that includes set-top boxes inside and outside the U.S.,” company spokesman Joris Evers said in an e-mail. “We want to make access to Netflix as easy and frictionless as possible.”

Such deals have obvious benefits for Netflix, placing it directly in front of a new audience of potential subscribers who might not have used online streaming services. For cable operators increasingly under pressure to offer subscribers the ability to watch what they want when they want it, including Netflix is a shortcut to more complex video-on-demand services.

But it’s not clear U.S. operators would be keen on bringing the disruptive streaming service directly into the fold. “There’s been kind of an animosity on the pay-TV side because Netflix is seen as contributing to the biggest bogeyman in the business today, and that’s cord cutting,” says Erik Brannon, a senior analyst at IHS Screen Digest. A spokesman for Time Warner Cable declined to comment on whether the company would ever offer Netflix. A spokesman for Cox Communications said the company had no current plans to do so, though its latest DVR devices have the technical ability to integrate a third-party app like Netflix.

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The state of play between Netflix and cable operators is much different in the U.S. than abroad. While Netflix has almost 29 million paying subscribers in the U.S., it has about 7 million total across 40 international markets. The company is in the midst of an aggressive international rollout, but has not scaled to a size to be perceived as a direct threat to cable operators in Europe. “Netflix is a relatively new entrant in terms of streaming services overseas,” Brannon says. “Competition from Netflix … hasn’t really been the same for pay-TV operators abroad.”

Instead of partnering with Netflix, some U.S. operators are competing directly with the service. Comcast launched a Netflix-like streaming service called Streampix last year, offering thousands of movies and television episodes on demand for $4.99 a month. Now the company is planning to vastly expand its TV-on-demand service to allow all cable subscribers to watch entire current seasons of shows like Justified and The Mindy Project, for example, according to the Wall Street Journal.

Cable companies are also working to expand the types of devices on which live TV can be viewed. Every major cable operator now has a “TV everywhere” app that allows users to watch some channels live on computers, smartphones or tablets. They’re also bringing this functionality to devices where Netflix has long been popular, like the Xbox 360.

As Netflix’s portability and back catalog become less relevant differentiating factors, the company is increasing its focus on original content. CEO Reed Hastings has said in the past that the service could back as many as 20 new shows, but in July the company admitted that initial ventures like House of Cards and Arrested Development provided only “a small but noticeable bump in membership.” Still, there’s lots of new content on deck. The company just released Ricky Gervais’ comedy Derek in September, along with a documentary about the 2008 financial crisis developed by Bloomberg Businessweek. Comedian Aziz Ansari is releasing his latest stand-up special (a staple genre of premium cable) via Netflix in November.

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If Netflix reaches HBO levels of consistent, high-profile productions, that could make cable operators reconsider integrating the service. But all signs point to U.S. operators keeping newcomers out of their walled garden. Intel, for instance, has been forced to delay its Internet-based pay-TV service because TV networks are reluctant to introduce new competition that could upset traditional cable operators. “If the money’s right, carriage of Netflix on an affiliate-fee basis could be a key differentiator for a U.S. pay-TV operator in the near future,” Brannon says. “Everything’s possible, but I just don’t think it’s likely.”

62 comments
bootspur
bootspur

Today, I have decided that I am going to "cut the cord," and I am looking for suggestions on reading material to educate myself about the process from A thru Z.

milsma
milsma

Why would Netlix migrate to Cable?  I'm tired of cable.  I'd rather use my Roku and be able to stream everything over the internet.  I'm waiting for the day when I can purchase HBO and Showtime from Amazon.  When that happens, cable is completely gone.

CraigG
CraigG

Netflix is great and everything, but until I can change channels immediately between the walking dead, sportscenter, and my DVR recorded american horror story...Cable TV is still where it's at, and you all know it. just shut up and take my money


sneedm6
sneedm6

Cable television is still a great investment if you want convenient and easy access to your favorite shows. Additionally, it's worth looking into what different providers offer service in your area. Often times the smaller providers have better service and pricing. I use Suddenlink - it's definitely worth looking into if it's available in your location - http://suddenlinkbusiness.com.


JackHercules
JackHercules

Eventually, I'd love to see cable die, but have networks live on via the $8 a month subscription service model.  We could subscribe directly for streaming services to companies like Netflix, HBO, AMC, NBC.. etc and just eliminate the middleman - the cable provider.  The networks could potentially make millions more over the small piece of the pie they are currently given from the cable provider, and at the same time, the general public would likely save money in this cafeteria type system and still have more content than they can reasonably desire.

RachelHumphrey
RachelHumphrey

I don't believe that's what netflix is doing. It's Taking OVER the Cable company. No one in their right mind is going to fork out $50 or more for Cable AND Pay for Netflix when at least 1/2 the shows on the cable are on netflix. What do they have to gain... not much?  But Netflix has a bunch to gain, the are getting access to the programming on the Cable channel indirectly. So tech. they have access, they add the shows to their line up, buy out the Cable company because everyone realizes they are getting the same on both and than Netflix shuts down the cable end of the company

Very Smart!

leonidcat
leonidcat

I love Netflix streaming on my iPad. I can always find something to watch and see TV series I never watched before.

nicmart
nicmart

Which almost raises the question, Why is Apple, with all its billions, so freakingly unable to move movie and TV content? It adds options to Apple TV at a glacial pace, and is almost a non-player in the movie streaming biz with its overpriced options. Why hasn't it bribed the NFL into letting it offer all the games? And for that matter, why does the NFL continue to offer its package almost exclusively through a source that few people want?

Awakeinwa
Awakeinwa

Netflix can evolve into the next HBO via internet unconstrained by cable boxes while embracing those who are forward thinking enough. HBO's potential is stunted precisely because they're boxed in as a cable only offering. Netflix has the option to embrace both essentially triangulating the comcasts of the world by focusing on profitable niches - whereas comcasts of the world have to focus on their entire subscriber base. Quality original content accessible anywhere anytime trumps everything. 

Hotpuppy
Hotpuppy

DOA!  Why would I pay Netflix?  I chose Tivo and Amazon Prime.  Tivo has lots of room to improve... Comcast is basically giving me digital cable with my internet... so it's hard to argue that.  Comcast's biggest issue is they are clinging to a model where 2/3rds of what they sell is junk I don't want.  Imagine buying a box of cereal, 16 ounces, and finding 12 ounces of several other cereals in the box?  That's cable.  It's got to change.  The media companies need to get the message... I don't want to buy junk channels that don't have fresh new content.

JohnDavidGibson
JohnDavidGibson

I gave up cable for Netflix a year ago. Eight bucks a month and NO COMMERCIALS!!! what a deal. 

DeeWes
DeeWes

I just re subbed to Netflix. And its well worth it. I watch on SmartTV. Its awesome not to have to connect to a box to have Netflix. In other words if my cable was gone Id still have netflix. I subbed to Huluplus just to check out, as they have alot of classic tv.  I hate paying cable company( cox communication) the mega sum to have their service. BUNDLE this bundle that.. and they always gouge for more.  Thinking of moving to direct tv. AND dont get me started on the commercials. Hulu is HORRIBLE For that. Commercials just like TV commercials every 5 or 6 min. May be the reason i wont continue with hulu tho i do like the offer of classic tv shows.. I cant sit still thru 3 commercials per break.  Netflix better not add commercials or im out there.. I am still watching the series touch of frost which has taken me so far all summer to get to the 9th season LOL 


ToughButFair
ToughButFair

And I'm about to "cut the cable", too, after years of loyalty to Cox Communications, simply because this arrogant and greedy company flatly refuses to adjust to the needs and wishes of its modern marketplace, or to listen to its own loyal, good-paying customers. 

Cox Communications can not, or will not:  1) Make it simple and easy to reach a Cox live customer service or technical service representative, when necessary; 2) Cease its never-ending, ridiculously inflationary price increases and restrictive programming "packages", which force its customers to over-pay for hundreds of 'junk' channels which they will never view, in order to access the handful which they do want to view; 3) Remove its customer requirement to pay for an expensive, totally superfluous, $20 per month telephone land-line, in order to maintain a very minimal 'discount' for Cox's internet and television service offerings; and finally, 4) Come clean with its paying customers in our small, midwestern-state, market about the ongoing cable TV service interruptions and annoying glitches which we experience, sometimes for weeks on end, whenever Cox decides to live-test any of its new or revised software products, deliberate acts which Cox Communications stubbornly refuses even to admit to, or be bothered with advising its paying customers is going to occur - but which are always painfully obvious to us, and which are a huge joke and embarrassment to Cox Communications' own employees, who actually live and work here in our captive, officially un-notified and un-acknowledged, Cox "live guinea pig" test market. 

Using live, good-paying, customers like us for Cox Communications' un-willing and un-informed guinea pigs, and subjecting us to ongoing inconveniences and service disturbances, while stubbornly refusing even to admit that their live-testing is the cause of many of our service problems, is the most egregious example of Cox Communications' deeply-embedded corporate culture of deliberate customer abuse with one hand, while they greedily take our money with the other hand. 

Cox's total lack of awareness of customer needs and desires, and its refusal to take any responsibility for its own, badly outdated, business model, coupled with its steadfast refusal even to admit the truth when it knowingly creates service problems for its own loyal, good-paying customers, are very rapidly sounding the final death knell for this second-rate, arrogant, company. 

My most recent batch of cable TV service problems/interruptions, which forced me to invest more than seven hours of my own time making five separate phone calls to Cox live technical support over a three-week period, were 100% a result of Cox's secretive, live software testing and revisions in my market.  It is this official, ongoing, deliberate, corporate deceit, and these totally unethical business behaviors, which have finally cost Cox Communications my business permanently.

Phono96
Phono96

Why use Netflix when you can just use torrents and download anything you want?

LenaLichten
LenaLichten

When Netflix started creating their own shows, and good ones too like House of Cards and Orange is the New Black, I wondered when we'd have a Netflix channel on cable.

buffalo.barnes102
buffalo.barnes102

I "cut the cable" years ago and haven't looked back. It was a little rough at first, with skeezy streaming sites of low quality and high virus probability. Downloading was hit-and-miss, with frozen screens a common occurrence. Things are improving quality-wise, but the reason I started streaming in the first place was to avoid the mind-rotting commercials. One has only to see how the finale of "Breaking Bad" was chewed up by AMC selling out to advertisers that would have nothing to do with them years ago. HULU, the dumpster for failed network shows or "one season wonders" from England, now has as many ads as network television. I have Amazon Prime for a yearly fee, but ads are even creeping onto that site's shows. It still beats paying $125 a month for 200 channels I never watch.

harriedclerk
harriedclerk

Too bad Netflix doesn't want to spend serious money on upgrading their infrastructure (servers) so that the average viewer can watch in HD without random pauses and other low bandwidth issues that have plagued it from the beginning. I don't subscribe to cable, but at least that industry spends billions on the equipment needed to deliver their product to the consumer, rather than spending billions on acquiring the rights to media without a satisfactory delivery mechanism. Even Crackle streams on average at about 5 times the bitrate, at least to my home .I, for one, have had enough of their mediocre product.

RobertLemasters
RobertLemasters

Entertainment...not a high priority with me...just more of the same boring old crap...what are some folks calling the movies and television sit coms now...a derogatory term but one that has some merit...Jewvies instead movies...because all of the entertainment and even most of porn production and marketing is owned and controlled by folks in the Jewish community....but who cares it is all silly, like the new tattoo fad rage...silly street thug graffiti for the body....the new aesthetic is so low...

spamjoes
spamjoes

This is bad.  Netflix striking deals with cable providers is the first move in them becoming embedded in cable packages.

In fact, this is the opposite of what should be happening.  We should be able to watch cable channels a la carte... not continuing to "bundle"... argh.

DataMan
DataMan

I've been connected to online/on demand TV for a long time using services like TVDevo.com . It's nothing new but it works for getting shows from around the world.

murphydogmom
murphydogmom

Since we are in an area scheduled to get Google Fiber next year, I plan on watching a lot of streaming Netflix movies.

cboy619
cboy619

I was hoping we could see cable channels on netflix...lol...

HisDivineOrder
HisDivineOrder

The cable operators own the media companies that are going to starve Netflix if they get too big.  Netflix will always be controlled by the consortium of companies that prevent anyone from challenging Big Cable.

ltdanman44
ltdanman44

cable companies in america are still stuck in the 80s.  

Kiyotoe
Kiyotoe

Cable companies in America will never let it happen.

DougDeNasty
DougDeNasty

The current Netflix model is failing. Most shows cannot be watched in the Minneapolis area during prime time because the system cannot keep up with demand. It isn't a case of local internet speed either, Amazon and other service can keep up just fine, but Netflix stalls out regularly. They are barely worth keeping at all. 

bootspur
bootspur

@sneedm6  That is the problem in a nutshell. These cable providers, Comcast, Charter, Dish, Direct, At&t Uverse,Time Warner, Cox, etc., have marked territories that blocks competition. That practice keeps prices high and cuts innovation out, and the same can be said of broadband as well. Strange as it sounds, nobody wants any competition, but turn on any Business News show, or Political sock fight and ALL YOU EVER HEAR from these hypocrites is, the "power of the FREE MARKET and the value of competition lifts all boats.

*

I like what is going on in the Texas power delivery market, regulators have opened the door to allow everyone into the "power generation business, the competition has cut energy prices to the homeowner. The model has shown to be effective, something like this needs to occur within the  cable/internet industry.

bootspur
bootspur

@nicmart  I'm quickly losing my love for the NFL. Played DT at OSU Cowboys, don't like the hype, the players, the game crews, at 53 perhaps it's flown past me. Not interested in the personalities, the fairy tale leagues played by the public, or artificial fields. I began watching football on TV at age 6, and until the last 10 years was a diehard football watcher. Still watch, but more out of habit and less out ofdesire. I've had a wandering eye of late for another sport, maybe Soccer..

leonidcat
leonidcat

@nicmart I just hooked up a small MAC mini and use it instead. I have a Roku for streaming and it's perfect. I keep all my own movies and tunes on the mini, along with my slideshows and personal movies. Works great. Apple TV sucks.

kmoreau0709
kmoreau0709

@ToughButFair I have recently discontinued their overpriced service as well. I have Hulu Plus and Netflix, it's all I need and the money you save is substantial.

JedidiahTmj
JedidiahTmj

@Phono96 > Why use Netflix when you can just use torrents and download anything you want?

Why paint a target on your back that says "come sue me" when the alternative only costs $8 per month?

jaredddbrown
jaredddbrown

@Phono96 Because not all of us are poor scum who illegally download content

And torrents suck anyways.  Direct Downloads are the way to go

SunderChitturi
SunderChitturi

@LenaLichten why not netflix be like the cable company... Why not get all the channels from netflix like a roku and also I can have the choice of seeing it anywhere too and just have one internet connection.

TheInsomniac
TheInsomniac

@harriedclerk I have never, ever had these problems. Netflix is the most reliable streaming service I've ever used. 90% of the time when there's a glitch, it's because my network has gone down. If it works perfectly for me, and assuming most of their servers are centralized, the problem is far more likely to be with your ISP.

anonTime
anonTime

@harriedclerk That's not Netflix's infrastructure that is causing those problems. It's caused by congestion on your ISP's networks and that is something that only your ISP can deal with (this particular problem is well documented with Verizon Fios, for example).

LenaLichten
LenaLichten

@spamjoes It doesn't mean that we can't still purchase Netflix as an independent service.  In fact, this might be a good thing.  Other channels, especially the premiums like HBO and Showtime, can argue that it's unfair that Netflix gets to offer their programs independently and they don't.  If I could get HBO and Showtime in real time without paying my cable provider all those extra fees, I would subscribe.

anonTime
anonTime

@spamjoes You would still be able to have your subscription separate from your cable bill, but you would be able to stream Netflix through every set top box you own.

rodanmusic
rodanmusic

@murphydogmom Google fiber isn't going to be much better than your current connection (unless it's 56k) for streaming videos so you might as well start now.

Yeah you might get a dedicated line, but Netlfix only requires what..1.5mbp/s for hi definition and probably doesn't allow you to connect at much higher speeds than that.  

If you have a 20mb/s connection you should be able to have multiple people streaming at the same time as it is.

ToughButFair
ToughButFair

@ltdanman44 You are correct, but these blood-sucking, second-rate, cable TV corporations are getting away with making 21st century, 1%-er profits off of all of us ordinary Americans.

This is one sucker who has had more than enough, and I'm not going to take it any more! 

Good riddance, Cox Communications!!

TheInsomniac
TheInsomniac

@DougDeNasty I never have this problem. It sounds more like your Minnesota-area ISP is struggling to keep up with demand, since I'm streaming from the same servers as you.

anonTime
anonTime

@DougDeNasty That problem is not with Netflix. It's with congestion on your ISP''s network and something that only your ISP can fix. This particular problem is well documented with certain ISPs like Verizon Fios.

digitalclips1
digitalclips1

@DougDeNasty We are seeing growing pains that's all.  The recent move to 'HD for all' has impacted our connection slightly I notice but they are building out infrastructure and caching systems country wide as fast as they can.

UleNotknow
UleNotknow

@DougDeNasty Yeah, that's why their stock has soared over 80% the past six months. You work for a cable company, don't you.

nicmart
nicmart

@bootspur @sneedm6 Very much true. Many forget that the cable monopolies were created by local governments that permitted only exclusive contracts. Competition was forbidden. Naturally, those on the inside -- both in industry and government -- still benefit from the lack of competition, while consumers are screwed. Crummy crony capitalism. I’m afraid that the only way out of the mess is technological innovation that makes cable irrelevant. And in the meantime as much competition as possible should be fostered. But who will foster competition when government at all levels is bought by the cronies?

nicmart
nicmart

@bootspur You have expressed my view pretty closely. I’d only add that the petty “unwanted touching” penalties have expanded the NFL tedium. As you say, watching out of habit more than pleasure. Don’t think soccer will do it. I’ll probably actually go outside and do things.

nicmart
nicmart

@leonidcat

It isn't terribly surprising that a device like the Mac mini, that costs $500-700, would have more capability than one that costs $100 does. Roku doesn't have Airplay to stream from my Mac, which kills it for me. Google's Chromecast might be the best second option when it has abundant content. With the upcoming Mac OS update Apple is adding the ability to turn a TV into a completely self-contained Mac monitor via Apple TV, which will make the device much more valuable, at least for Mac users.

But Apple, of all companies, should be a better content provider. It took years for even a weather app to be brought to Apple TV, and even then it hasn't been done so that it is very convenient. Too many clicks!

TheInsomniac
TheInsomniac

@LenaLichten @spamjoes HBO is owned by Time Warner. Time Warner sells cable. Time Warner has an incentive, therefore, to make us pay for the whole package instead of just giving us HBO.

That's why we'll never, ever be able to just buy HBO Go and stream shows. That's why we have to wait, on Netflix, for these shows to come to DVD. And that's why cable sucks.

anonTime
anonTime

@rodanmusic @murphydogmom For the highest quality HD you need 5.8 mbps (plus some overhead). 3D streaming requires 12 mbps.

While your current ISP may be able to offer those speeds, on the back end is where things can get congested (it happens all the time with Verizon Fios) resulting in lower quality. That isn't going to be an issue with Google Fiber.

ToughButFair
ToughButFair

@digitalclips1 @DougDeNasty You need to look to your ISP to fix this problem for you.  Either they've done another top-notch, "blame anyone and everyone, but never take any responsibility for our own corporate failures" propaganda job on you - or you DO, in fact, work for a cable TV provider.