Do US cable operators have the vision to partner with Netflix?
Cable television operators in the US find themselves in an increasingly difficult position with respect to Netflix streaming video. On one hand it is the chief competition for their legacy pay TV business. On the other hand it arguably the biggest driver of increasingly higher speed Internet subscriptions, accounting for around a third of US Internet traffic.
Netflix has already established partnerships with Virgin Media in the UK and Com Hem in Sweden. Among the terms of these deals each company provides a Netflix TiVo app for their customers. At a Goldman Sachs conference last month Netflix CFO David Wells also expressed interest in forming similar partnerships with US pay TV providers.
Now the Wall Street Journal is reporting negotiations with multiple cable companies (paywalled content) including Comcast and Suddenlink Communications to establish those partnerships. According to their sources there are still significant issues to be resolved in negotiations between the parties. Perhaps the most important, at least for consumers, is the Netflix demand to integrate technology to improve streaming quality into broadband provider networks. Presumably this would involve some kind of caching on ISP networks which would allow both higher bitrate streams and lower bandwidth utilization by Netflix servers.
