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12
March
2012

Netflix Looking for Cable Alliances

I have written in this space that in a best-case scenario, OTT video threatens and has the potential to radically disrupt the broadcast media model used by traditional MVPDs. Before this happens, MVPDs will try to absorb the disruptive technology so that it conforms to the existing business model. It is this context that I see the pressure on MVPDs to move toward a la carte programming tiers, and also a recent new item concerning the effort of one prominent online video distributor, Netflix, to form alliances with cable operators. Under this model, Netflix would become another premium movie channel, like HBO. Netflix’ move is motivated from the cable side by cable’s “TV Everywhere” initiatives, such as Comcast’s Streampix and Verizon’s partnership with Redbox to compete with Netflix.

“If Netflix could transition its subscriber base to cable, and attract new subscribers to a premium service, that could mean more revenue for cable operators including Comcast to woo cord-cutters back to the fold, and forge a new path to long-term survival for Netflix. It could be a win-win for strange bedfellows, who may find themselves snuggled up, streaming (and dreaming) of new revenue opportunities together.”

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