Comcast Says No to Netflix
On March 6, Reuters reported that Netflix had begun exploratory conversations with the largest cable multi-system operators (MSOs) concerning joining forces. By Thursday, March 8, at least one cable operator, Comcast, had said no to the idea of providing a portal to Netflix as an additional on-demand source for its subscribers.
Comcast, who recently acquired NBC-Universal and is the largest cable MSO in the United States, provides a brand new streaming service in its Xfinity package called Streampix. Comcast characterizes the service, which appears to be a competitor to Netflix, as a premium add-on, similar to other subscription on-demand options.
Prior to the price increases and structure changes attempted last year that saw Netflix lose close to 2 million subscribers, Netflix was seen as a competitor to cable. After losing content from Starz, and beginning to purchase original content for streaming, Netflix is said by some analysts to be attempting to transform itself into more of a premium cable channel, versus a subscription, on-demand service.
The appearance then is that by trying to forge alliances with large MSOs, Netflix is hunting for fast subscriber acquisition. Companies like Dish, Verizon FiOS, DirecTV and Time Warner Cable all have, or are developing, on-demand services on their own that likely will include an Internet streaming component.
Netflix pricing and its current distribution may be a roadblock. How does Netflix plan to compensate the MSOs? Netflix quality of content and service may also be drawbacks. For many customers, having access to high-quality video is extremely important.
The Netflix website appears to be fairly straightforward, but if you are looking for information concerning content strictly delivered in high definition, it is difficult to determine from the information provided if high-definition content is available.
Netflix has some high-definition content, but at higher rates that the $7.99 basic streaming package the website promotes. Customers looking for a DVD rental option must be prepared to spend another $7.99 per month.
For customers that use Netflix to watch reruns of old television series, one has to wonder if by establishing premium channel status, Netflix may lose access to the reruns. Many of the large cable networks program large blocks of their schedules with the same content. Will the content owners still make it available to Netflix?
There doesn’t appear to be much of a reason for an MSO to add Netflix in terms of appeal to customers and revenue potential.