By Shalini Ramachandran
Netflix Inc. is about to take a small but significant step to
make its streaming-video service easier for viewers to access.
Netflix has reached a deal with Atlantic Broadband, a small
Quincy, Mass. cable operator, to integrate its streaming service as
an app through TiVo Inc. set top boxes provided by the cable
operator, according to people familiar with the matter.
Atlantic Broadband, a wholly owned subsidiary of Cogeco Cable
Inc. serves about 230,000 residential and business customers in
Western Pennsylvania, Southern Florida, Maryland, Delaware and
South Carolina.
The deal, expected to be announced Monday, will be similar to
arrangements Netflix already has with operators in Europe, where
Netflix continues to control the billing relationships with its
subscribers, the people said. The company has been seeking such
arrangements with U.S. operators for months.
By being available through the set top box, Netflix says it is
easier for consumers to flip between streaming Netflix videos and
watching traditional television without having to juggle remote
controls. As it is, many consumers have to stream the service
through Internet-connected devices such as an Apple TV or Roku.
Netflix has had conversations with just about every operator in
the U.S., including giants such as Comcast Corp. and smaller firms
such as Suddenlink Communications Inc., Mediacom Communications
Corp. and others. It has run into snags where it has insisted that
operators who want the app also directly connect to Netflix's
specialized servers, which the online-video outlet says improves
the quality of its streaming video. Some operators have been
reluctant to strike those network interconnection deals without
compensation from Netflix. The company recently agreed to pay for
such an interconnection deal with Comcast.
Netflix disclosed in its quarterly shareholders' letter Monday
that it expects to reach set top box deals with cable operators in
the U.S. this quarter. It said that in the U.S., it will focus on
first reaching agreements with operators that lease TiVo set-top
boxes to customers. (While many cable companies allow customers to
buy TiVo boxes at retail that can be used to watch their cable TV
services, relatively few in the U.S. lease TiVo equipment as their
primary boxes for customers.) The deal to be announced Monday may
also include news of other such Netflix tie-ins with other small
pay TV operators who lease TiVo boxes, the people said.
Smaller cable operators have been more open to striking such
deals than bigger cable companies that have invested more
aggressively in video on demand services that compete directly with
Netflix's offering. Cable executives at smaller companies say that
broadband is increasingly the more important product than video for
them, since rising programming costs are making video an
increasingly less profitable offering.
Write to Shalini Ramachandran at
shalini.ramachandran@wsj.com
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