Will Netflix Inc. (NFLX) Stop Decline in Subscriptions?

Posted by Lynn Eisler December 18, 2014 0 Comment 848 views


Netflix, Inc. (NASDAQ:NFLX) stock was the subject of an angry reaction from Wall Street a few weeks back after the company reported that its subscription numbers were falling. The company now seems to have found a unique way of averting any further decline. The company has inked an agreement with DISH Network Corp. (NASDAQ: DISH) a deal that will boost the networks chances of increasing its subscriptions by tapping into U.S pay homes.

Push For Market Share

As part of the agreement, Netflix, Inc. (NASDAQ: NFLX) will be integrated into Dish’s Hooper set top box. The deal is also the first of a kind that Netflix has inked with a pay TV network as it looks to bolster its share on the video streaming space.

DISH Network Corp. (NASDAQ:DISH) subscribers as a result of the integration will be able to switch with ease to online video content offered by Netflix using the same device. The integration essentially gives Netflix, Inc. (NASDAQ:NFLX) access to an additional 14 million users under Dish network. Despite the integration, users will still be required to pay for Netflix content as the service only accords them the chance to switch from Pay TV to online content with ease.

Pay-Tv Concerns

It has been a long journey for Netflix, Inc. (NASDAQ: NFLX) in convincing Pay TV networks to sign such agreements with some networks shrugging the idea seen as a potential threat to their customers.  The giant streaming company has had success in inking such deals in Europe but continues to face significant resistance back at home. The new partnership goes a long way in positioning Netflix, Inc. (NASDAQ: NFLX)’s streaming services to more people across the nation.

Dish will also look to benefit from the agreement as it is believed to have been pushing for an ‘over-the-top’ TV service that is to be offered over the internet. Dish remains committed to ensuring the partnership succeeds having stated that in the future it might make Netflix, Inc. (NASDAQ: NFLX) content searchable on its Hoper interface. Dish hopes the agreement with Netflix will bolster its leverage with media companies as competition continues to heat up in the space.

Netflix Targeting Less Tech-Savvy Audience

Netflix on its part maintains it is pursuing such deals to reduce the agony that Pay-Tv customer usually go through when switching from one platform to another. The arrangement also gives Netflix access to less tech-savvy people who will still continue to watch their favorite shows through the set-top boxes rather than having to rely on tablets laptops of Apple TV for streaming content.

Netflix, Inc. (NASDAQ: NFLX) saw its subscription decline in the last quarter something it would love to change with such arrangements at the back of support from Pay TV networks. A decline in subscription numbers sent the company’s stock down in the market a trend that it looks to offset in the coming quarters.

Stay tuned for further updates regarding Netflix, Inc. (NASDAQ: NFLX).



About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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