If You Can’t Beat Netflix, Join ‘Em

Jacob Harper  |

Netflix Inc. (NFLX) is reportedly in talks with cable providers Comcast Corporation (CMCSA) , Suddenlink, and several others to begin offering Netflix as an application on cable boxes, potentially turning a bitter rivalry into an unlikely partnership.

Cable companies have been scrambling to adapt to a sea change in how consumers watch television, as streaming companies like Netflix grab an increasingly large chunk of the market share.

On September 9 Netflix closed a deal with UK Virgin to begin offering Netflix via their TiVo boxes. However, such a deal with cable companies would be the first of its kind in the US.

According to The Wall Street Journal, the cable companies are already reticent to give into some of Netflix’ demands, such as including special technology developed by Netflix in the boxes. Cable companies are concerned that acquiescing to Netflix could lead to the company asking for preferential treatment down the road.

The cable companies are bargaining from a weakened position. While Comcast has trudged along at a decent clip, with its shares gaining 19 percent on the year, Netflix has exploded. The company is expanding aggressively and is one of the hottest properties on Wall Street. Despite slightly missing analyst expectations in their last earnings report, Netflix’ shares are nearing an all-time high, and are up 224 percent on the year.

Netflix popped on the news, gaining 5.45 percent in early trading to hit $317.25 a share. Comcast benefited from the rumors as well, gaining 0.59 percent to hit $46.31.

 

(image courtesy of Flickr)

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