Netflix Cable Partnership to Rival HBO?

Netflix CEO Reed Hastings has been in talks with cable operators about adding the streaming video service onto their set-top boxes, Reuters is reporting.

Reuters says Netflix could be offered as a feature the cable company would charge for and share the revenue with Netflix.

On one hand, it sounds like madness. Why would a cable company encourage users to try out a service that could replace much of its video watching? But what if the cable company uses Netflix as its VOD arm? Then the cable company wouldn’t have to spend so much time developing and managing is VOD platform. And what if that cable company also controlled a major TV network and a movie studio?

Reuters also suggests Netflix sees itself as a rival to cable TV channels like HBO. Netflix does now offer some of its own original programming. If a complete integration of Netflix offerings isn’t possible, due to many complicated content licenses, perhaps Netflix original programming could come to cable VOD without the need to actually be a Netflix customer.

“To be able to add Netflix to the bill, that might be very powerful, especially as we do more and more original content,” Hastings said at a Morgan Stanley media and technology conference in San Francisco last week. “We are more and more a classic cable network.”

Comcast, however, has come out and said it's not interested in partnering with Netflix. "We have no plans to offer access to Netflix to our customers through our Xfinity TV service, no matter what device," Comcast spokeswoman Alana Davis told FierceCable.

A few weeks ago, Verizon announced that it will be working on a streaming service with DVD rental company Redbox.

Streaming video over broadband has created a whole new world for content providers, so expect many tentative moves and trial programs before all the players figure out where they stand.