Is Netflix Becoming Cable?

Netflix.com rocks!

Netflix.com rocks! (Photo credit: luxuryluke)

Speculation that Netflix is looking to be carried by cable operators has been stirring up the interwebs. Perhaps I am a romantic in believing that Netflix is NOT trying to become the cable industry, but I am skeptical about this story.

Reed Hastings has compared Netflix to HBO. I believe he was pointing out that Netflix and HBO are in competition for bidding for new high quality programs in order to attract subscribers. He was specifically distancing Netflix from Hulu, as Hulu is still in the business of selling ads despite the addition of the subscription service Hulu Plus.

Subsequent stories point out how getting cable carriage would be a reversal for Netflix. Yes, that is why it is hard to imagine.

First, cable systems and their VOD offerings are dinosaurs in terms of user interface, user friendliness, and overall usability. Why would Netflix want to fit itself into an existing technology that is distinctly old school rather than new school?

Second, this speculation seems to rest on the idea that Netflix is exactly like an early 1980s cable network, showing repurposed old programming with no ads. But Netflix is based on the idea of the long tail, where users can access vast amounts of niche content and not be stuck in the limitations of a linear television flow. So, how could it possibly be in Netflix’s interest to squeeze its relatively infinite offerings into a “channel” even if that “channel” allowed VOD delivery? (See point one: cable VOD is awful.)

Third, cable pipes carry both video and broadband. Although we subscribers pay separate fees for those two services, they are all binary digits coming through the same  pipe. Why would Netflix want to leave its place as an over-the-top video provider to squeeze onto the cable line-up? If Netflix is worried about finding new subscribers in cable users who don’t know how to find Netflix otherwise, the fact that Netflix is accessible on all sorts of platforms (mobile, iPad, Wii, etc.) should solve that problem in time. The option of “bundling” Netflix with cable is unclear: is this a billing strategy? Then wouldn’t the MSOs want their cut to give up shelf space on the cable dial?

Perhaps Netflix is merely trying to downplay its competitive advantages by appearing to join the cable ecosystem? Or it wants to prove it’s not causing cordcutting by offering to join in? It would be a sad day for viewers, I think, if Netflix joined  TV Everywhere.

I can’t help wondering if this story could be an example of #oldmediathinking. Like other legacy media folks, who imagine that all paths lead back to their legacy business models, perhaps some cannot imagine that a competitor to cable could actually continue to thrive *outside* the cable “ecosystem.” Like some publishers who believe that promoting authors’ work should result in bookstore sales rather than e-book sales, could this story about Netflix  reflect the ongoing anxiety about viewers’ shift away from linear TV to online over-the-top TV?

(P.S. Thanks to Amanda Lotz for Xfinity image.)

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One thought on “Is Netflix Becoming Cable?

  1. Pingback: The Chutry Experiment » Distribution Matters

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