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Netflix Goes Fishing for Cable Deals

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
3/7/2012
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Welcome to the cable news roundup, Hump Day edition.

  • Netflix Inc. (Nasdaq: NFLX) has met with major U.S. cable operators recently about bringing its streaming library to MSO video-on-demand (VoD) platforms and selling access for a premium, Reuters reported. Netflix, which has been styling itself as an HBO competitor, recently lost access to Starz Entertainment LLC programming, which could open the door for app integrations, for example, on MSO-supplied TiVo Inc. (Nasdaq: TIVO) boxes. RCN Corp. , which leases TiVo boxes, has already told Light Reading Cable that it's interested in reopening its dialogue with Netflix. U.K. MSO Virgin Media Inc. (Nasdaq: VMED) has also expressed interest in offering Netflix content. (See Netflix's Path Into MSOs Becomes Clearer, Virgin Media Wants Netflix Content and Netflix Plays Friendly With Cable.)

  • Google (Nasdaq: GOOG) is looking to sell off Motorola Mobility LLC 's set-top box business before it closes its $12.5 billion acquisition in part because Google won't get a warm welcome by MSOs, The New York Post reports. If so, the U.S. Motorola-Cisco Systems Inc. (Nasdaq: CSCO) set-top box duopoly could be on the way to its final days as software takes over the key set-top functions in IP-connected TVs and tablets. Cisco, sources have confirmed to Light Reading Cable, has been putting feelers out for its set-top box business, with private equity firms among the potential suitors. (See Why Cisco Wants Out of Set-Tops (Or Not) and Google-Moto Deal Fans Cable Fears .)

  • Cox Communications Inc. has promoted Jill Campbell to EVP and COO. Campbell, mostly recently SVP of field operations, succeeds the retiring Leo Brennan, a 28-year Cox vet. Meanwhile, EVP and CFO Mark Bowser will expand oversight to include the company's Cox Business and Cox Media divisions.

  • EchoStar Corp. LLC (Nasdaq: SATS)'s HughesNet satellite broadband division is cooking up a 20Mbit/s (download) service that would outpace ViaSat Inc. (Nasdaq: VSAT)'s 12Mbit/s Exede tier, says DSL Reports. HughesNet's current high-end service maxes out at 2Mbit/s in the downstream. (See ViaSat to Phase Out WildBlue and Will Satellite Get Caught in VZ's LTE Crossfire? )

  • ABC Family is making full episodes of original series, including Switched at Birth, available on iOS devices. In addition to free, ad-supported episodes, ABC Family is also offering some for outright purchase via the iTunes store.

  • Video server and software firm Concurrent Computer Corp. (Nasdaq: CCUR) has tapped Jim Marino as SVP of global sales. He's late of CommScope Inc. and Harmonic Inc. (Nasdaq: HLIT).

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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    msilbey
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    msilbey,
    User Rank: Blogger
    12/5/2012 | 5:40:22 PM
    re: Netflix Goes Fishing for Cable Deals


    Door slam. Comcast has all the pieces it needs. Why would it bring in Netflix now? 


    Separately, the NYP piece on Google's attempt to sell Motorola's set-top biz is interesting, but missing some important context. First, we may be moving toward an all-IP world, but it's going to be a hell of a long time before we get there. The set-top cannot be on its deathbed. Somebody has to manage all that QAM-based TV that's still going to be around for years. MSOs must be quaking in their boots right now at the idea that the big vendors are fleeing the boxes that operators have in millions and millions of homes today. Logistics disaster.


    Second, the NYP makes no mention of the rest of Motorola's cable biz beyond the set-top operations in its sales speculation. I have no idea what the revenue proportions are, but Moto certainly has a lot of resources dedicated to video backend stuff and not just customer premises equipment. Will those pieces be parceled off too? Or just subsumed in the Googleverse? 

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:40:22 PM
    re: Netflix Goes Fishing for Cable Deals


    Do you think Comcast heard them out or slammed the door shut?  Comcast's Streampix has the makings of  a Netflix competitor, so would seem like a long shot unless they could get Netflix to bend on a revenue share that, if I had to guess, would cause Netflix to jack its streaming rates, which, you know, went over soooo well the last time. JB

    DCITDave
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    DCITDave,
    User Rank: Light Beer
    12/5/2012 | 5:40:21 PM
    re: Netflix Goes Fishing for Cable Deals


    Why are cable companies doing any deals with Netflix at all? Doesn't this just prove the point that they can be disintermediated quickly if only the cable companies would build better apps? They already have the content and the wire, but not the Netflix apps and customer service.

    shygye75
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    shygye75,
    User Rank: Light Sabre
    12/5/2012 | 5:40:21 PM
    re: Netflix Goes Fishing for Cable Deals


    Cable wouldn't be the first industry to do a preemptive amputation on its core business.

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:40:20 PM
    re: Netflix Goes Fishing for Cable Deals


    The way it's been explained to me is that cable customers will be watching Netflix on the TV with our without their help, so they might as well start to embrace that fact and try to integrate Netflix and keep them engaged on the cable platform instead of having them go off to a different input ot watch Netflix on a Roku box or a blu-ray player.   Imagine cable would want a piece of the action, so maybe this means Netflix is starting to warm to the idea of a revenue share? JB

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:40:20 PM
    re: Netflix Goes Fishing for Cable Deals


    I agree that the assumption that the STB is going to be dead and buried anytime soon is shortsighted, though Google may have some good strategic reasons to want to shed that business and put it in somebody else's hands to manage.  And if they sell of the STB piece, they would most certainly look to sell off  Moto's CMTS/cable access biz, too.  Arris? Ericsson?


    But not sure the MSOs would be horribly fearful if Google sold it to someone they could trust.  Besides, there are lots of other options and ways for that gap to be filled.  JB


     


     

    shygye75
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    shygye75,
    User Rank: Light Sabre
    12/5/2012 | 5:40:18 PM
    re: Netflix Goes Fishing for Cable Deals


    If you try to cover all revenue bases, there's a chance that you weaken your position all around. For the past five years or so, cable ops have faced their most direct threat, from telco video providers. They seem to be getting through that relatively intact, with a large assist from the fact that they are launching counterattack (business) services. If a market or product sector is worth getting into, then do it. Coopetition is a long shot.

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:40:16 PM
    re: Netflix Goes Fishing for Cable Deals


    Okay, we can definitely take Comcast off the list, and it really comes as no surpise as we already surmised.  But I think we can put any MSO that's leasing TiVo boxes on the list of potentials: Suddenlink, Grande, Charter, RCN, to name a few. JB

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