It was a triple treat for streaming video service Netflix as it finally struck deals with three cable operators to launch its own television channel this week. For the very first time, subscribers in the United States will very soon be able to watch the content of Netflix as they were watching a regular cable channel.
Netflix will become an application to particular set-top boxes in the U.S. on cable companies Atlantic Broadband, Grande Communications and RCN Telecom Services, providing subscribers of the said cable operators the ability to watch the former's content, which they could only get on their computers, smartphones, tablets or a third-party set-top box. RCN and Atlantic will roll it out on Monday, and Grande will follow suit at the end of May.
"If you're an RCN customer, perhaps in the D.C. area, you would pick up your remote control, you would tune to Channel 450, and there you'd find Netflix. You'd select it and that'll launch the Netflix app," said chief marketing officer David Isenberg of the Atlantic Broadband, adding that to watch at Netflix is as simple as changing the regular TV channel.
For the deal to be possible, Netflix revealed it discussed with some content partners to make way for streaming on these cable boxes. The new deal took three years to complete, said chief executive Jim Holanda of RCN. It came weeks after Netflix closed a controversial financial deal with Comcast to guarantee a smooth viewer experience and faster download speeds since it relies on Internet connection. The Comcast deal, however, doesn't make Netflix available in the former's cable box.
Market analysts said this new strategy of Netflix somehow shows its bigger goals to contend with cable services such as the HBO. In fact, research says the Time Warner-owned HBO sees Netflix as a threat that the former was firm to refuse licensing of its old TV shows such as "The Wire" and "The Sopranos" to the latter. HBO instead allowed streaming through Netflix's rival, the Amazon."
Netflix was said to have experimented also on earlier agreements with pay-TV providers in the United Kingdom, Sweden and Denmark.
Customers are required to get a simultaneous subscription to one of the three cable operators as well as to Netflix. The service, however, would require a TiVo set-top box that will be provided by the operators. At present, TiVos are also available at retail stores where customers can buy from, but until now it doesn't have the Netflix functionality.
"Our view has long been that the marriage of linear television and streaming over-the-top (OTT) TV is the future of television, and Netflix has clearly emerged as a must-have over-the-top service," said Tom Rogers, CEO and president of TiVo, to Multichannel News.
Based on research, the triple deal brings close to a million cable subscribers: RCN with 440,000 subscribers, Atlantic with 230,000 and Grande with 150,000. This is seen to grow all the more as additional customers are expected to sign up for the new offering.
Netflix is planning to increase its rates in July by a dollar or two, although the higher charge is said to initially affect new customers only.