Will Netflix find bundling a joy? Comcast not buying it, but Apple TV a first step

There was a plot twist in the saga that is Netflix this week: a Reuters report that the Los Gatos company is positioning itself as another offering for cable companies. Today, however, there is word that Comcast may not let Netflix stick with the script. Jeremy Owens of the Mercury News writes that a Comcast spokeswoman has said the cable giant is not interested.

Rejection from the nation’s largest cable company — which is starting up Streampix, a Netflix rival — isn’t surprising and is a setback, but it doesn’t automatically kill Netflix’s plan.

This week Apple announced, among other things, that its new Apple TV will allow users to subscribe directly to Netflix. While that may seem to be no big deal because Netflix has been available on many set-top devices for a while now, people such as Peter Kafka of AllThingsD point out the distribution model is different: Netflix users who stream TV shows and movies on their game consoles, for example, still have to sign up directly with Netflix. But with Apple taking a cut of Netflix subscriptions, the streaming service becomes an Apple TV offering similar to becoming a bundled cable service. The advantage to this tactic, according to an analysis by Motley Fool, is it helps reduce churn, or loss in subscribers. Rewind to last year: Netflix lost nearly a million subscribers after its famed too-much-too-soon push into streaming-only, which included raising prices. (See The year of Netflix’s decline: Customer satisfaction, stock price, more.) As a standalone offering only, Netflix is more vulnerable. But as part of a larger bundle — the a-la-carte cable channels some have been clamoring for don’t seem to be coming soon to a living room near you — the company can take advantage of things such as people’s hesitation to drop their cable service. Even if Comcast isn’t in the picture, other distributors of content might see Netflix as a worthwhile addition to their lineups.

Netflix CEO Reed Hastings indicated last week that becoming a bundled service is a “natural direction” for his company, according to that Reuters report. “Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO,” he said. (Revised) Following in the footsteps of HBO (end revised), Netflix has begun to offer original content.

Netflix shares are up more than 1 percent to about $110.10 as of this post.


Tags: , , , , , , , , ,


Share this Post

  • Bob

    I tried the Comcast ”Streaming” and its not much of a selection. Though I have not tried Netflicks so not sure if its better or worse.
    I would pay extra for TCM archive streaming

  • Mick

    Quiet everyone, genius at work!

  • Sheldon Rothenberg

    It is misleading to say that like HBO, Netflix has begun to offer original content. HBO has more than begun. Consider the Emmy award winning biopic on Temple Grandin, the Game Of Thrones series and last fall’s Scorsese documentary on George Harrison. Netflix has a long, long. long way to go to show that it can create compelling original shows.

  • Levi Sumagaysay

    Sheldon, you’re right, and that’s not what I meant at all. I’ve revised the wording of that sentence. Thanks for pointing it out.