Cable providers have been in a Netflix-induced red haze as of late. Many companies have seen large numbers of customers cancel their premium channels and go with Netflix Instant instead. Let's face it, the cost of premium channels is rather high. I personally have cancelled my HBO and use Netflix or other forms of streaming and Redbox to watch the movies I want, when I want.
Reuters states that one cable company may end up experimenting with offering Netflix by the end of the year. If an agreement is reached, the company would have to modify its content licensing deals, which currently don't allow Netflix to bring programming to cable set-top boxes.
Netflix declined to comment, but released this statement:
"This news is consistent with the company's attempt to brand itself as an Internet network and makes some sense for [pay TV distributors] that are concerned Netflix could trigger cannibalization of their video business," Janney Montgomery Scott analyst Tony Wible said in a report Wednesday morning. "In the end, we believe this move could signal that Netflix needs new mechanisms to drive sub growth and that it could be concerned about the looming implementation of usage-based broadband" pricing as recently introduced by Time Warner Cable.
Added Wible: "A deal with [pay TV distributors] may increase Netflix's chances of survival, but would force the company to reduce its terminal revenue opportunity by sharing average revenue per user with [distributors]."
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