Comcast and Netflix, once bitter enemies, appear to have buried the hatchet: The No. 1 cable company says today that, as a result of a new agreement, subscribers using its X1 box soon will be able to flip to Netflix as easily as they do premium channels such as HBO.
“We have much work to do before the service will be available to consumers later this year,” Comcast says. “We’ll provide more details at that time.”
The news, first reported by Recode, cheered Netflix investors. Its shares are up 2.0% in mid-day trading. The company has been trying to secure a place for itself on cable systems.
It should open opportunities to reach homes that don’t have broadband-connected TVs or where people don’t want to switch inputs on their sets in order to watch shows such as House Of Cards or Orange Is The New Black.
That could be especially important for “older demographics, a key area where Netflix remains under-penetrated,” Morgan Stanley’s Benjamin Swinburne said last month.
Other pay TV distributors have warmed to the idea of offering Netflix. Charter CEO Tom Rutledge told investors in May that he is “pursuing” efforts to integrate streaming services including the three leading ones “into our [user interface] to make it seamless to the customer…Most people who buy Netflix buy cable or satellite. It’s another channel, a premium service — and an inexpensive one.”
But Comcast seemed to be another story.
There was bad blood from a 2014 deal Netflix CEO Reed Hastings felt compelled to make that required his company to pay Comcast in order to feed programming directly to its broadband infrastructure — a key to offering smooth transmissions.
Netflix became a vigorous opponent of the cable giant’s deal to buy Time Warner Cable, which Comcast abandoned after federal officials threatened to oppose.
The companies also have locked horns in debates at the FCC over net neutrality and its plan to let independent manufacturers sell cable set top boxes.
Comcast is a part owner — with Disney and Fox — of Hulu, a Netflix competitor.
Tech trade group Incompas, which includes Netflix as a member, applauded the agreement.
“Consumers are hungry for new content, and fresh creative voices,” CEO Chip Pickering says. “Netflix is a trailblazer that has opened doors to other streamers, and we encourage and support policies that help make search, discovery and access to all over-the-top content easier.”