Is Netflix the Biggest Threat to the Cable Industry?

Bobby Tulsiani [Posted by Bobby Tulsiani]


Ad Age has a great article about Time Warner’s “TV Everywhere”
program
, which follows the recent news by Comcast’s for its “On Demand Online” service. Both moves are clearly an attempt to get
ahead of cord cutting and cannibalization that could happen with the spread of
online video.

The cable companies have closely been monitoring YouTube and
Hulu to get a sense of the appetite for online video. But for all the attention they are focusing
on those Internet giants, they might want to start paying more attention to
their flank where NetFlix is making some aggressive moves (wait isn’t NetFlix a
movie company!?).

NetFlix has been getting a lot of praise for its streaming
platform that is being distributed across a wide range of devices. What is going less noticed is the range of
content available on that service is much more than movies. NetFlix has a deal with ABC & CBCS (Hulu has
neither)
and just signed a deal with SouthPark (Hulu & Joost weren’t willing
to provide cash payment):

With a real business that generates profits even in the downturn, NetFlix can
continue to build its library while still compensating  creators:

“There was no talk of ad splits or guarantees or advances, just a
payment for a show Netflix seemed really happy to have,” Mr. Stone
said. “We’ve never given the show to anybody else to stream, but we
like Netflix as a service. We use it.”

My colleague James McQuivey often talks about consumers
flocking to convenient products
. With drop dead easy connections to the TV,
plans to launch an affordable streaming only service, and a loyal base of
consumer - NetFlix may not only be the most convenient solution for movies, but
also for TV.

Comments

re: Is Netflix the Biggest Threat to the Cable Industry?

Even with frustratingly low resolution on their video download service (Netflix - please offer higher quality download option soon?) their service beats the pants on all the rest because it just works.