A rumored Netflix app for cable set-top boxes...
A rumored Netflix app for cable set-top boxes probably won’t happen, said MoffettNathanson analyst Craig Moffett in a blog post Friday (http://bit.ly/1exp8UZ). Cable operators would likely want a cut of Netflix’s profit to allow the service on their set-top boxes,…
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but it’s unlikely that cut would match the profit cable operators get from HBO, he said. Moffett said Netflix is positioning itself as a competitor to HBO, so if the availability of Netflix on set-top boxes starts to cut into HBO subscription revenue, it would represent lost funds for operators. “If there is any cannibalization of HBO whatsoever, that’s a bad trade,” said Moffett. A Netflix deal would also threaten HBO’s and Showtime’s relationships with cable operators, he said. “Would not HBO (and Showtime) then be forced to at least consider going direct-to-consumer themselves, cutting out the cable operator entirely in response to cable’s traitorous Netflix deal?” A Netflix deal would also likely affect the sale of on-demand video, and the profit of content producers in turn, Moffett said. On the regulatory side, it’s not clear how Netflix’s traffic would count against data caps or for usage-based pricing, and granting Netflix preferred status could affect the net neutrality debate, said Moffett. “Even something as simple as putting a Netflix app on a set top box is fraught with complexity.” Another analyst wrote last week that a Netflix/cable deal could help operators avoid new broadband-pricing regulation (CD Oct 16 p17).