Cable Companies Join Netflix As Users Switch To Streaming Services

An increasing amount of cable companies seemed to give into the streaming boom as some companies reportedly decided to partner with streaming behemoth Netflix. More U.S. cable companies are expected to make Netflix accessible through its set-top boxes.

No. 3 cable provider Charter Communications Inc is supposed to partner up with Netflix, according to Reuters Sunday. More than a dozen top U.S. cable companies joined up with Netflix and some could start selling the streaming service in tandem with video and internet offers.

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Cable provider Altice NV ATCA.AS attempted a similar deal in France and is looking to duplicate it in the U.S., sources told Reuters this month.

"Our whole model is about cooperation with many of the (streaming) providers," Altice USA ATUS.N Chief Executive Dexter Goei told reporters in May.

Netflix said it considered making similar types of deals with other pay TV providers.

"We're now looking at proposals for including Netflix in some services and beginning to learn the bundling part of the business," Netflix CEO Reed Hastings said during a webcast in July. "We're interested in expanding that."

These partnerships could help expand Netflix’s customers in the United States, market analysts considered saturated, while expansion overseas has exploded.

As of June 30, Netflix reported 51.92 million U.S.-based streaming customers and 52.03 million foreign-based streaming customers, which surpassed analyst’s predictions.

According to a report released July, Parks Associates found that 59 percent of U.S. broadband households subscribe to Netflix, Amazon, or Hulu.

Netflix’s deals with pay TV companies helped it surpass expectations in the U.S. market, Cowen & Co analyst John Blackledge told Reuters.

"U.S. consumers are not taking solely a Netflix, Amazon, or Hulu subscription. Many are shopping around and trialing new services to get access to interesting content unavailable through the big services," said Brett Sappington, Senior Director of Research, Parks Associates in a July statement.

He added, "Interest and viewership in OTT video services have led to an increase in total subscriptions since 2015, including an increase in households subscribing to two, three, or even four or more services. All this translates into more money being spent by consumers and more opportunity for niche content services to capture revenues."

The deals cable companies made are a turnaround compared to years of resistance to streaming. Pay Tv providers viewed Netflix as a huge competitor since its inception in 2007. Some cable executes deemed the partnerships to combat cord-cutting, a voiding of cable subscriptions, while endorsing high-speed internet offers.

Pay tv, streaming service combinations started in 2013, with British company Virgin Media. U.S. partnerships launched in 2014, with small businesses like RCN Telecom Services.

For RCN patrons with TiVo TIVO.O boxes, Netflix was made available as an on-screen option in the menu. RCN customers not subscribed to Netflix could sign up for a free, one-month trial seamlessly through the on-screen menu.

U.S. cable leader Comcast Corp inserted Netflix into its Xfinity X1 box set last year. 30 percent of Xfinity customers logged into Netflix via an existing account or by signing up, the company told Reuters in May.