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Netflix Streams Onto US Cable

Mari Silbey
4/25/2014

For the first time in the US, Netflix Inc. (Nasdaq: NFLX) is heading to cable set-top boxes.

Atlantic Broadband , Grande Communications , and RCN Corp. all plan to roll out Netflix as an integrated app on leased boxes from TiVo Inc. (Nasdaq: TIVO). While several European operators have launched a similar offering -- including Virgin Media Inc. (Nasdaq: VMED) and com hem AB -- this latest Netflix news represents the first break for the popular online video service in the American cable market.

Netflix has had a tough road in the US, particularly among larger operators investing heavily in their own video-on-demand catalogs and subscription over-the-top services. Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Verizon Communications Inc. (NYSE: VZ) have launched Streampix and Redbox Instant by Verizon respectively as OTT options, and AT&T Inc. (NYSE: T) announced just this week that it is teaming with The Chernin Group on a $500 million joint venture to "acquire, invest in and launch online video businesses." (See AT&T Joins OTT Video Parade.)

On the other hand, smaller cable operators have greater reason to team up with Netflix, given the low profit margins in the video business. As several independent providers emphasized at the ACA Summit earlier this month, when there's an option to cut content costs and still provide a compelling product for broadband and TV customers, they're open to considering it.

The Netflix service for Atlantic Broadband, Grande Communications, and RCN "will be available to customers with TiVo service as early as April 28, 2014," the companies said. Customers who are also Netflix subscribers will be able to access the OTT app alongside linear TV, VOD programming, and other web-based content. According to Atlantic Broadband chief marketing and strategy officer David Isenberg, who described the set-top experience, "Now, watching Netflix is as easy as changing the channel."

Beyond Atlantic Broadband, Grande, and RCN, TiVo has multiple other operator customers in the US who could be targets for Netflix, including Suddenlink Communications , Mediacom Communications Corp. , and General Communication Inc. (GCI) (Nasdaq: GNCMA). Charter Communications Inc. offered TiVo set-tops to subscribers temporarily, but stopped leasing the boxes last summer.

— Mari Silbey, special to Light Reading

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Liz Greenberg
Liz Greenberg
4/29/2014 | 10:24:30 PM
Re: Childish
I know Mitch...I am held hostage by Comcast/AT&T just like everybody else.  I always love how they purport to do things for their customers but the reality is it is always the bottom line.  If they had true competition, we would probably be much happier customers.
Mitch Wagner
Mitch Wagner
4/29/2014 | 6:51:00 PM
Re: Childish
Liz - Cable companies operate in environments where customers have few choices of alternatives, and where cost margins are fierce. It's no wonder that customer service ratings are often low. In the end, a public business is beholden to shareholders not customers. 
Liz Greenberg
Liz Greenberg
4/28/2014 | 1:10:23 PM
Re: Childish
I'm with you Mitch...can't they just all learn to get along???  Make the customers happy? 
jabailo
jabailo
4/28/2014 | 11:50:25 AM
Re: Welcome, Captain Kirk
I don't know if Netflix has been partnering, so much as paying them the "protection money" so they can get their feed through in a neutral fashion.

The design of a single site providing diverse on demand content asynchronously, versus multiple sites (channels) providing synchronous entertainment would seem create some interesting frictions.

 
Mitch Wagner
Mitch Wagner
4/28/2014 | 12:19:18 AM
Childish
Is it childish of me to want to move to an area where the cable company offers TiVo as its standard set-top box? We still miss our TiVo and swear at the DVR that our cable company provides instead. 
DOShea
DOShea
4/27/2014 | 4:35:21 PM
Re: Welcome, Captain Kirk
Netflix has been making attempts to partner with the big cable guys, right? I guess it thought it could get them to reconsider their own ventures, but it doesn't look like that is working.
jabailo
jabailo
4/26/2014 | 3:29:37 PM
Welcome, Captain Kirk
This sounds like an alliance between Star Fleet (Netflix) and the Royal Navy circa 1800.   Would the Enterprise need to make peace with a bunch of frigates, I'm not sure, except it is probably an admission that the days of the "channel" are coming to a close, and the ability to specifically select content are here to stay.

 
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