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In the media: Netflix cozying up to cable?

Wed, 03/07/2012 - 2:07pm
Mike Robuck

Netflix CEO Reed Hastings is reportedly in discussions with some of the largest cable operators in the nation in regard to adding Netflix's streaming service to the MSOs' on-demand services.

Reuters cited unnamed sources in reporting that Hastings has met with senior cable executives over the past few weeks, with at least one cable operator possibly offering Netflix's service before the end of this year. Netflix's service would be streamed to the cable subscribers' set-top boxes and, according to one source, would be added on to a cable subscriber's existing cable bill.

Hastings has said at recent investor conferences that Netflix could serve as a viable alternative to Time Warner's premium HBO offering, according to Reuters.

"It's not in the short term, but it's in the natural direction for us in the long term," said Hastings, speaking at an investor conference last week, according to Reuters. "Many [cable service providers] would like to have a competitor to HBO, and they would bid us off of HBO."

Joining forces with a company that was once considered one of the primary causes of alleged cord cutting by cable operator subscribers would be a big turn of events for the cable operators, but at least they would still serve those customers in some capacity.

It's hard to imagine that Comcast would take up Netflix's offer due to its Xfinity Web portal, large streaming library and its recently announced Streampix service.

Netflix ended the fourth quarter with 24.4 million subscribers in the U.S., up from 23.8 million at the end of September. That gain of about 600,000 customers was a contrast to the loss of 800,000 subscribers last summer after Netflix raised its U.S. prices as much as 60 percent.

Netflix, Hulu and YouTube have also recently embarked on offering their own original programming.

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