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Cable Technology Feature Article

October 14, 2013

Netflix Explores Comcast, Suddenlink Partnerships

By Tara Seals, TMCnet Contributor

Netflix is taking the advice of industry analysts seriously: it’s reportedly looking to bolster “coopetition” with pay-TV providers with a deal to become part of a hybrid TV strategy with cable MSOs.

According to the Wall Street Journal, the over-the-top (OTT) video darling has approached Comcast (News - Alert) and Suddenlink Communications about being offered as a native, embedded app via set-top box.

The architecture of what those arrangements would look like is unclear. It could be that Netflix could act as a premium network, a la HBO (CEO Reed Hastings has always said that he considers the home of “Game of Thrones” as one of his top rivals), and be billed out on the cable bill—making it a revenue generator for cablecos. Or, it could be added as an option under the video on demand menu. The wrench there though is that Comcast already has its own Netflix-like service, Streampix, available via video on demand (VOD).

Image via Shutterstock

Another possibility is for MSOs to leverage Netflix as part of a streaming video bundle that would also include high-margin, upper-tier broadband service—which is what’s keeping cable alive in the face of ongoing video subscriber drains, quarter after quarter. But WSJ sources said that Netflix wants its prospective partners to sign up for its OpenConnect content delivery network (CDN) service, which caches content closer to subscribers on the network and thus improves viewer experience. The cablecos are reportedly balking at that, concerned that they could be perceived as giving Netflix special treatment and violating Net neutrality (News - Alert) rules.

Netflix already has a similar deal with U.K. cable operator Virgin Media, wherein users can access Netflix via STB—and Netflix retails its billing relationship. The sources told the WSJ that the talks were in the very early stages.

Edited by Alisen Downey

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