Netflix (NFLX) Could End Up on Your Cable Bill Soon...
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Netflix (Nasdaq: NFLX) shares are trading notably higher Wednesday morning following reports late Tuesday the streaming media giant might be in talks for a cable partnership.
According to Reuters, Netflix CEO Reed Hastings has "quietly" been in talks with several cable companies to add Netflix service to their lineup. In addition, Hastings might be looking for the companies to add Netflix to their set-top boxes (STBs), which generally contain a DVR setup as well as on-demand programming.
The news is good for Netflix investors. In the past, cable companies have seen Netflix as a threat to their $100 billion business segment, though Hastings has contended in the past that Netflix was meant to compliment cable offerings.
Talks might be further along than many believe. Reuters noted Netflix might be added to at least one prominent cable company's offerings by the end of 2012...at least, in experimental form. Still, with the recent strategy to shift from DVD-plus-streaming to separate services, Netflix shares have taken a beating over the last half-year or so as investors question the direction Netflix plans to go.
The move would also be another way to stave off competitors. After seeing the success Netflix has been having, larger companies like Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Google (Nasdaq: GOOG), and more, have been making moves to begin streaming content through their own platforms.
Reuters said even if a deal is reached today, there would still need to be work: content contracts would have to be re-negotiated, STB formats updated, and marketing efforts would need to be made. The entire switch would still take months before anything is launched.
Investors seem to be liking the news Wednesday, however; Netflix shares are indicated up nearly 5 percent in pre-market trading.
According to Reuters, Netflix CEO Reed Hastings has "quietly" been in talks with several cable companies to add Netflix service to their lineup. In addition, Hastings might be looking for the companies to add Netflix to their set-top boxes (STBs), which generally contain a DVR setup as well as on-demand programming.
The news is good for Netflix investors. In the past, cable companies have seen Netflix as a threat to their $100 billion business segment, though Hastings has contended in the past that Netflix was meant to compliment cable offerings.
Talks might be further along than many believe. Reuters noted Netflix might be added to at least one prominent cable company's offerings by the end of 2012...at least, in experimental form. Still, with the recent strategy to shift from DVD-plus-streaming to separate services, Netflix shares have taken a beating over the last half-year or so as investors question the direction Netflix plans to go.
The move would also be another way to stave off competitors. After seeing the success Netflix has been having, larger companies like Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Google (Nasdaq: GOOG), and more, have been making moves to begin streaming content through their own platforms.
Reuters said even if a deal is reached today, there would still need to be work: content contracts would have to be re-negotiated, STB formats updated, and marketing efforts would need to be made. The entire switch would still take months before anything is launched.
Investors seem to be liking the news Wednesday, however; Netflix shares are indicated up nearly 5 percent in pre-market trading.
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