Mar 07, 2012, 05.06 AM | Source: Reuters
NETFLIX-CABLE:EXCLUSIVE - Netflix in talks for cable partnership
REUTERS - Netflix
In what would ratchet up its competition with HBO, the talks could lead to Netflix becoming available as another on-demand option for cable subscribers through their set-top boxes, according to three people familiar with the talks. If a partnership came to fruition, a cable operator might offer Netflix as an additional option added onto a subscriber's cable bill, according to a fourth person.
Any partnership would be a major about-face for many in the traditional cable industry who had initially seen Netflix as a threat to their $100 billion-a-year business.
Hastings has strongly hinted at investor conferences in recent weeks about the possibility of Netflix one day being a cable channel rival to premium networks like Time Warner Inc's
"It's not in the short term, but it's in the natural direction for us in the long term," said Hastings, speaking at an investor conference last week. "Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO."
While most industry watchers considered Hastings' comments as little more than thoughts about the future, people familiar with the talks said he has already met with senior cable executives to discuss how such a partnership might work. At least one cable operator could experiment with offering Netflix by the end of the year, said one of the people.
A Netflix representative declined comment on any talks with cable operators.
While Netflix offers mainly old TV shows and movies through its Web streaming service, it had been seen as a threat by some cable operators and cable networks worried the $7.99 a month service would lead to customers dropping the much more expensive cable TV package, a fear that has become known in the industry as "cord cutting."
Time Warner Inc
Netflix also faces more competition from incumbents including Verizon Communications'
There are also significant plans still in the works at Google Inc