Netflix, Please Don't Go Cable

A report from Reuters that Netflix is in talks with an unnamed cable company has us worried since Netflix turning into cable is the last thing we want.

A report from Reuters that Netflix is in talks with an unnamed cable company has us worried since Netflix turning into cable is the last thing we want. The information comes from unnamed sources and only mentions a quiet discussion of adding the streaming service to cable. But, if it all pans out, Netflix will become "available as another on-demand option for cable subscribers through their set-top boxes ... as an additional option added onto a subscriber's cable bill," sources told Reuters' Yinka Adegoke and Lisa Richwine. Translation: The streaming service "of the future" would join forces with the established companies we'd hope it would help us get away from.

This setup would get in the way of that cord cutting we oh-so-badly want to do. Adding Netflix to cable would defeat the whole purpose of the service. We accept Netflix's somewhat shoddy library because not having to pay for cable makes up for it. For $7.99 per month subscribers get reliable streaming with lots of options. Even with the loss of Starz Play, there's plenty on Netflix that can satiate a former channel surfer. A Comcast Xfinity double play Internet-Cable package costs ten times as much, at $79.99, offering lots of expensive channels (ESPN) some of us don't want (ESPN). We want to get away from those shackles -- and we're not the only ones. Last quarter, both Time Warner and Comcast lost cable subscribers. And, then there are all those Cable Nevers AdAge warned about a few months ago: A new generation of Internet-only watchers.

Netflix's potential move, unfortunately, might make sense for business, as CEO Reed Hastings noted at the Morgan Stanley Media, Technology and Telecom Conference last week. “It’s not in the short term, but it’s in the natural direction for us in the long term,” he said, speaking of joining up with cable companies. “Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO." As more companies enter the streaming game -- Comcast just launched its own Netflix-ish competitor last month -- it's getting harder for Netflix to compete, both for eyeballs and for contracts with content providers. As we saw with Starz refusing to renegotiate its contract and HBO pulling its DVDs -- things are getting vicious.

Given all the competition, it's not clear, which cable provider would do business with the streaming leader. Forbes' Eric Savitz has some guesses:

Comcast just launched its own streaming service, Streampix, targeted at its own subscribers. Time Warner Cable could do it; though HBO is tied with corporate cousin Time Warner Inc. Verizon has partnered with Redbox and is started its own streaming service. So maybe AT&T uVerse? Cablevision? Cox? 

Things might not turn out all that bad, though. Perhaps Netflix would continue offering a watered down version of its service for those looking to finally cut the cord.