March 7, 2012 by David K. Sutton
Netflix Via Cable Set-Top Box? CEO Reed Hastings Explores Possibility
Cable companies see Netflix as a threat to their entertainment business. They are afraid of a mass exodus of customers, exchanging expensive cable TV packages for Netflix’s very affordable streaming plan, offering tens of thousands of TV shows and movies for $7.99 a month. For people who don’t watch sports and live events, it’s definitely an attractive alternative which has become known as ‘cord-cutting’.
But now Netflix is thinking about getting into the cable business, that is, partnering with cable companies to offer an on-demand version of the Netflix service. This would make Netflix available directly on your cable set-top box. CEO Reed Hastings has made it no secret that he has set his sights on HBO. He is positioning Netflix to be an alternative to HBO’s original programming. Because of this, it should come as no surprise that Netflix might look to offer its service to cable TV companies, but two big companies won’t be offering Netflix any time soon. Comcast just launched their own online streaming service called Streampix and Verizon recently partnered with Redbox.
As a long-time Netflix customer, I hope this doesn’t change their online streaming business model. Netflix made several large business mistakes last year that saw hundreds of thousands of customers leave in protest. I don’t consider this news alarming as long as Netflix continues to listen to what their customers want, with no repeats of last year’s mistakes. What I don’t want to see is Netflix embracing the old-fashioned cable TV model. Online streaming has become a big business and I believe it is the future of video entertainment. Netflix can continue to be a leader and an innovator or they can bow out and allow another service to take their place. Let’s hope they learned from their missteps last year.
dks
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