That big news that came out last year about Netflix possibly bringing an app to the set-top boxes of big time cable providers like Comcast and Time Warner? Not looking so hot these days. Comcast’s $45.2 billion acquisition of Time Warner (which isn’t a done deal yet as it’s still subject to regulatory approval, and regulators might have some qualms about the largest cable company in the U.S. buying the second largest cable company in the U.S.) has reportedly put talks of making Netflix available to Time Warner customers on hold, and they’re not expected to resume until after the deal closes, according to Bloomberg. The deal is expected to close some time before the end of the year, if that narrows things down for you.
Comcast was also reportedly in talks with Netflix last fall, but those talks have also been fairly unproductive since Comcast began funneling its attention and resources into its new Internet TV service X1, which allows customers to watch TV and movies on demand (including the last nine in-season episodes of their favorite shows). X1 also bridges the divide between TV-watching and mobile viewing that has proved to be such a difficult feat for many cable companies. Users can watch TV on their phones and even download shows to take with them and watch later. They can also schedule recordings from their phone and so on.
David Bank of RBC Capital Markets has said that Comcast’s X1 platform “out-Netflixes Netflix.”
Netflix does have a clear advantage though: it owns the rights to $7.2 billion in content over the next five years. That includes movies from Disney and DreamWorks, as well as its own original programming, like House of Cards and Orange is the New Black.
Comcast has over 1,000 engineers working on the X1 platform, which could theoretically include Netflix, but some analysts have expressed doubt that Comcast would want to give Netflix a chance to cannibalize their own viewership. It’s not a completely whackadoodle idea though. UK cable provider Virgin Media made a deal with Netflix last September, even though it already offers an on-demand service. Now, the 1.7 million homes that use Virgin Media TiVo will also have access to Netflix.
Netflix has had to differentiate itself from other VOD services by coming up with its own original programming. Comcast, meanwhile, is offering movies before the DVD release. Comcast said last month that it became the largest seller of Despicable Me 2 over Thanksgiving.
Going the HBO route might give X1 an edge, but Netflix’s U.S. subscribers already top HBO’s, so Comcast might be picking the wrong team here.
Comcast had 21.7 million video subscribers as of December 2013. Netflix has 44 million worldwide subscribers.
Image source: businessinsider.com