Netflix is coming to your cable box.
Earlier this year, Comcast and Netflix announced a deal that would put Netflix on millions of X1 cable boxes in the US. Now the companies have confirmed that this will happen next week (though one tipster said Netflix had already arrived on his X1 box).
“X1 customers with Netflix subscriptions will be able to easily browse and access over the internet the extensive online collection of Netflix TV shows and movies alongside the live, on demand, DVR and web programming included with their Xfinity TV subscription,” the companies wrote in a statement.
Why is this a big deal?
For Netflix, the move could help jumpstart domestic subscriber growth. Though Netflix added more domestic subscribers than Wall Street expected last quarter, its sluggish growth in the U.S. has prompted some analysts to murmur about saturation.
But there are segments of the population that Netflix still hasn’t quite conquered. There is room for growth.
In a recent note, analysts at UBS highlighted that Netflix, in the US, is underpenetrated among older consumers and those living in Middle America.
“These consumers represent an opportunity for subscriber growth if Netflix can convince them to sign up and stay with the service,” the analysts wrote. Getting Netflix onto cable boxes could help with that.
Beyond helping get new subscribers, integration into X1 could also help Netflix keep old ones.
“The Netflix integration into the X1 platform means our mutual customers will no longer need to change inputs or juggle remotes,” Netflix CEO Reed Hastings said in a statement. “Now they can seamlessly move between the Netflix app and their cable service, enjoying all the TV shows and movies they love without hassle.”
That makes Netflix more valuable.
Here are a few things the companies point out that customers can do with the integration:
- “Launch the Netflix app by simply saying ‘Netflix’ into the X1 voice remote.”
- “Browse Netflix content alongside other on demand movies and shows.”
- “Search for an actor like ‘Adam Sandler’ or ‘Kevin Spacey’ and see everything they are in, across both Xfinity and Netflix.”
- “Start from the beginning of long-running shows like ‘The Walking Dead’ or ‘Scandal’ – with all prior seasons from Netflix and the current season from Xfinity – available in one place.”
The terms of this deal are likely similar to the ones Netflix has with streaming boxes like Roku and Apple TV, or smaller cable operators in the US.
In June, Morgan Stanley explained how the deal would likely work, in a reported unearthed by Recode:
“We would expect Netflix to give up some economics, similar to other distribution partners like Apple or TiVo but we do not believe it would meaningfully alter the direction of Netflix profits over time. Payments to distribution partners are reported in marketing expenses on Netflix’s consolidated financials.”