updated 07:35 pm EST, Tue March 6, 2012
Netflix may make deals to weave into cable TV
Fresh leaks have hinted that Netflix is talking directly to cable TV providers to make itself an add-on service. Multiple Reuters informants had Netflix negotiating to become an on-demand, paid extra for TV service. One provider would be ready to provide Netflix before the end of 2012 if cleared quickly.
Hurdles could exist, such as needing to extend or renegotiate licenses to put video on cable set-top boxes. Many of the deals assume either disc or digital access.
None of the various parties have confirmed their involvement.
Although seemingly contradictory for Netflix, often seen as a means for cord-cutters to drop traditional TV, the strategy would ultimately fulfill some goals of CEO Reed Hastings. He had floated the idea of cable deals in the past and has regularly seen Netflix as a competitor with cable networks' bonus Internet video efforts, like TV Everywhere. The emphasis by necessity of older movies and TV shows, along with a handful of original content, can make it work as a complement to traditional sources.
A deal would hand it a unique advantage over Amazon Instant Video as well as iTunes by becoming a cheap bolt-on option for Internet video while still keeping its independence. Amazon and Apple both operate their services as targets for their own hardware, like the Kindle Fire or iPad, where Netflix operates solely for itself. Comcast may be antagonized by the deal, as it's planning its Streampix service as a self-contained option accomplishing much of what Netflix would offer.