Today’sdevelopment in weird potential frenemy relationships is an interesting one with
Comcast now planning to bundle Netflix into its cable subscriptions,
the companies announced today.
Known as the original
cord-cutting service, Netflix serves as a hub for not only a ton of original
content, but also a huge catalog of movies and shows that offer a near-endless
flow of entertainment for the average user for less than $15 a month. Comcast
added Netflix to its X1 interface starting in 2016, but it appears that the
success of this among traditional cable subscribers may have encouraged Netflix
to begin working more closely as it tries to tap more and more consumers.
The companies said
they will expand that existing relationship by bundling Netflix into the
overall subscription in new and existing Xfinity packages. Netflix’s subscriber
growth — the primary driver of its value as a public company — continues to
surge, and it appears that this could be another piece in its tool kit to keep
that engine humming. Those cable packages already include an increasing
breakout of diverse services that allow for streaming outside of the
over-the-top experience, like HBO Go and ESPN, and this offers another
streaming service on-the-go for users.
By tethering to
additional over-the-top services, Netflix has a chance to woo subscribers that
might otherwise just stick with their existing service providers and bake
itself directly into that experience. These kinds of cross-platform
subscriptions are becoming a little more common and a big driver of user growth
— for example, Spotify works with Hulu to create a multi-service subscription
that ends up, on paper, with more users for both. Getting that taste may also
encourage users to eventually graduate onto the service directly and drive
additional revenue for those companies.
Whenever Netflix
reports its quarterly earnings, all eyes are typically on that subscriber
number. It’s the leading indicator for the company’s growth, even as it spends
more and more money on original content to acquire subscribers. But by getting
into the cable bundle, Netflix can find a way to get that content into the
hands of subscribers that may one day cut the cable as more and more streaming
options emerge for the content they typically want. ESPN is already dipping its
toes into the streaming side with ESPN+, which while limited signals an
opportunity to break out and attract those consumers that aren’t interested in
a cable bundle.
The bundle, which will
be available to new and existing Xfinity customers, will be included in its
cable TV, phone and internet plans. It seemed throughout the lifetime of
Netflix’s streaming expansion that it would be the harbinger for cord-cutting,
but now finds itself fitting with existing consumers that already are fine with
a cable subscription.
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