Is Cable TV a Threat For Netflix Inc (NASDAQ:NFLX)?
Netflix, Inc (NASDAQ:NFLX) has been making every effort to bolster its customer base and has now stumbled upon an unexpected source that will go a long way in helping it in this direction. Cable operators that can potentially be harmed with the distribution model that the company follows are all set to join forces with Netflix, Inc (NASDAQ:NFLX). They are all chalking out deals with the company to air its programs via their own set- top boxes.
In early September, Netflix, Inc (NASDAQ:NFLX) signed a deal with Virgin Media, the U.K based company to stream their services to their 1.7M subscriber-base, who use the TiVo set top boxes. Another deal on the same lines was announced with Sweden’s Com Hem. This is the largest cable operator in the country and has around 1.8m subscribers.
The perfect solution
It goes without saying that viewers in both the countries will have to actually buy a Netflix, Inc (NASDAQ:NFLX) subscription but what is more important is that this has opened up a path for more business-bonding between internet-based services and the conventional cable operators who were always at logger-heads with one another in a space that was becoming increasingly competitive.
Users stand to gain as well, as they will be able to transition from cable to Netflix programs and vice-versa in a seamless manner as the same set-top box will be used for both. At the moment, users are required to switch from one device to the other to access the respective services.
A win-win situation
Deals such as these open up an entirely new potential customer base for Netflix, Inc (NASDAQ:NFLX) as there are still a large number of people who have not experimented with using internet-based streaming services earlier. The cable operators also benefit as they are able to provide users with access to on-demand video services. All-in-all, everyone stand to gain.