Netflix is currently in negotiations with Comcast, Suddenlink Communications, and others to make its streaming video service available as an application on cable TV set-top boxes, according to a Wall Street Journal report that cites anonymous sources with knowledge of the matter.
If true, this wouldn’t exactly be the first time Netflix has reached out to cable TV providers for a deal like this. In 2012, Comcast initially rejected a proposal by Netflix to bundle service with its cable TV service, opting instead to pursue its own on-demand video service Streampix. But since Streampix — or any other offer from a cable provider — has failed to slow momentum or popularity for Netflix, the negotiations are apparently back on.
A partnership between Netflix and cable providers has advantages for both sides. Netflix would gain yet another platform through which its subscribers, or potential subscribers, can access the service. And cable providers would be able to offer customers access to an attractive new service using the same distribution channel as their live TV service (the cable box), which could keep customers happy and prevent them from cutting the cord in the future.
The negotiations between Netflix and cable providers are still at the very early stages, according to WSJ’s sources. However, one of the biggest hangups is Netflix’ insistence that cable providers begin using the company’s Open Connect technology, which helps ISPs minimize the massive strain Netflix puts on their overall network, thus speeding up the entire connection for everyone. But ISPs like Time Warner Cable, AT&T, and Verizon all view the use of Open Connect as special treatment that Netflix is demanding as a protective measure in case other services make similar deals with the cable companies. (That’s silly, of course, because there are no other competitors that come close to the kind of bandwidth usage that Netflix does.)