Netflix wants to rub shoulders with channels like HBO, Showtime and Starz, a new report suggests. According to Reuters, Netflix CEO Reed Hastings has secretly been meeting with U.S. cable companies to discuss a deal that would see the streaming service offered alongside traditional networks, perhaps as an additional option added to a subscriber’s cable bill.
Hastings has been vocal about his desire to see Netflix rival premium networks like HBO, and while his comments may seem like a pipe dream, people familiar with the matter said the CEO has already met with senior cable execs. Cable companies have long seen the DVD rental and streaming service as a threat to the industry, but despite this, Hastings has hinted at investor conferences in recent weeks to potentially work out a deal. If so, one cable provider may even experiment by offering Netflix at the end of 2012.
“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.”
With streaming content so popular on devices like tablets and home video game consoles, cable providers are beginning to warm up to Netflix’s business model as the Los Gatos-based company has become a bit of a money box through licensing older shows. A deal with the top U.S. cable providers may prove even more lucrative.
In addition, if Netflix were to reach a deal with cable providers, the costs involved may distract companies from charging higher Internet prices to consumers, Reuters said. That’s an idea I’m sure a lot of consumers can get behind.
But even if a deal is reached, it could be months before the service is offered through cable providers because of licensing deals. Netflix’s existing contracts currently prohibit the streaming company to deliver shows via a cable box, said a source, which may prove to be on of the bigger hurdles.
Netflix hasn’t been shy about expressing its desire to join the ranks of channels like HBO. The company previously unveiled its intentions on becoming a true contender by offering original programming, including Lilyhammer and the much anticipated return of Arrested Development.