A growing number of U.S. cable operators are forming alliances with Netflix to get their streaming programs included in cable operators TV subscriptions and plans; Netflix is an ever-growing streaming service that cable operators want to make sure they’re onboard with as consumers TV viewing continues to evolve.
Charter Communications Inc. is expected to make Netflix available through its set-top boxes, joining more than a dozen cable providers that adopted this model in Europe. Some U.S. providers could begin to to sell their streaming service as part of their internet and video packages.
According to the source abroad, Altice is trying that same approach in France, and the company aims to extend the deal to the U.S.
Netflix CEO Reed Hastings mentioned we’re now looking at proposals for including Netflix in some services and beginning to learn the bundling part of the business; we’re interested in expanding that.
Additional tie-ups could help Netflix hook new users in the U.S. as they are near saturation here while they are soaring in the foreign markets. The number of subscribers is the key metric for Netflix investors, and the breakthrough growth has made the company a Wall Street star.
Netflix reported 51.92 million U.S. streaming customers as of June 30, and 52.03 million in international territories.
The closer ties with pay TV providers represent an about-face from the early days of Netflix streaming, which started in 2007. Many in the pay TV industry viewed the digital upstart as a challenge to their longtime business of selling bundles of channels delivered via cable wires or satellites. But, as Netflix soared in popularity TV distributors began concluding that it would be more beneficial to welcome Netflix into their plans seeing as how their customers already streamed that service anyway.
Cable executives now see these partnerships as a way to battle against cord-cutting, the dropping of pay-tv service, and to promote higher-speed services in order to stream your favorite shows even faster. In some cases, distributors receive a cut of subscription revenue when they sign up Netflix users.
It becomes a win-win for TV providers and Netflix as both retain and gain new customers while picking up additional revenue.
The set-top integrations began in 2013 with Virgin Media in Britain. U.S. partnerships started in 2014 with a few smaller distributors including RCN Telecom Services. RCN customers use their TiVo boxes to seamlessly switch back and forth with a click of a button to their cable network over to Netflix as a channel listed on the on-screen lineup.
It’s reported that RCN viewers who have not subscribed to Netflix can do so on the spot, starting with a one-month free trial. More than 80 percent become paying Netflix customers.
The power of suggestion when it is displayed on your TV screen and the offer of a one-month free trial, hence why 80% of viewers become Netflix subscribers because they don’t want to miss out on their TV shows or movies by not continuing their subscription. Netflix is also probably banking on the fact it’s easier to keep the subscription for a low upfront cost then cancel it.
According to Blackledge, By the end of 2016, 13 of the top 25 U.S. pay TV distributors had similiar arrangements with Netflix.
For examples, U.S. market leader Comcast embedded Netflix in November 2016 into its Xfinity X1 set-top box, which is used by 55% of its 21.5 million residential video customers. Thirty percent of X1 users have logged into Netflix using Comcast’s system or are signing up for a new account.
Charter also stated plans to integrate Netflix into their plans; they just have not set a date yet for its launch.