A few years ago, there was a bit of a cold war going on between Netflix and the larger cable MSOs that flared up with that interconnection dispute between Level 3 and Comcast. That particular argument was resolved publicly a few months back, but now reports over the weekend have Netflix in negotiations with cable MSOs of a very different sort that suggests a rapidly shifting terrain.
Apparently, the OTT video poster child is in talks to get its application onto the set top boxes themselves. Why would cable operators be willing to give such access to a rival that they’ve argued in the past is mooching off the last mile connections they built with their bare hands?
Apparently, as Bloomberg argues, they now see having Netflix integrated as “a tool to attract and retain customers, rather than a threat that will lead to cord-cutting”. In fact, Netflix subscribers may be more willing to pay for those bigger, premium connections that cable operators are trying to sell. That seems to finally be putting the last mile’s value in the correct context – as the inevitable future driver of revenue rather than the video subscription itself.
In other words, hiliting OTT options for customers around might be a positive thing for business in a world where we just don’t consume video the way we did back in the 80s, and not a moocher at all. Could it be that as the FCC’s Net Neutrality regulations await word from the courts, everyone else has broken out the hugs?
Ok, probably nothing quite so drastic. But the OTT question does seem to be evolving quite rapidly this year and I do think some battle lines are getting blurred.
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Categories: Cable · Video
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head fake, not buying it.
At the end of the day Netflix, as a streaming content delivery system, is a giant annoyance sucking valuable consumer entertainment wallet share from cable companies.
Now that Netflix has moved into the content business — e.g.., House of Cards, Orange is the New Black — cable companies are probably hoping Netflix morphs into just another cable channel (premium or regular) and abandons its content delivery business. This will permit cable companies to make money from the premium channel revenue stream or advertising on the “Netflix Channel”, something cable companies can’t do today.
I don’t see Netflix doing this unless studios bid up the price of existing content so high that Netflix has no choice but to abandon the streaming content delivery aspect of their business and instead become another content channel like AMC or USA.
If Netflix remains a player in streaming content delivery, sapping $10/month from consumers without cable companies seeing any of that, this fight will get worse.
From my consumer experience only – Cable doesn’t offer a reasonably priced ala carte offering, just a very high bill. No, I don’t need multiple MTV channels, shopping networks, etc. Similar experience with satellite services as well.
The answer, at least for me, seems to be dump TV delivery, keep broadband, get an antenna for local digital channels, and use Roku or similar device to access the content you want (Netflix, Amazon, Hulu, etc.).
the entity who figures out live sports delivery will win it all…..
“the entity who figures out live sports delivery will win it all…”
BINGO!