Comcast Acquisition Puts Potential Netflix, TWC Deal on Hold
February 18, 2014 9:15 AM
Netflix and TWC were in talks before the acquisition, but nothing solid yet
Netflix has been working hard to form ties with cable companies and have its app placed on set-top boxes, and just as it was in talks with Time Warner Cable (TWC) about such a deal, Comcast came along and
, Comcast's acquisition of TWC could slow Netflix's talks with the latter. Discussions of a potential deal will likely have to wait until the acquisition is complete by the end of 2014.
Striking a deal with TWC would've been a huge win for Netflix, as it would have pressured other cable companies to offer the service that 44.4 million people currently subscribe to.
While Netflix has successfully penned such a deal with two European cable services, U.S. companies have proven to be a bit more difficult.
Comcast is one of the major U.S. cable companies that have previously been skeptical of allowing Netflix onboard. Instead, Comcast has its new X1 set-top box platform, which could eventually challenge services like Netflix because it delivers content via the cloud and can be updated to mimic some of its features.
[SOURCE: The New York Post]
However, Comcast has been promoting X1's use of Web apps for traffic and weather as well as movie and TV rentals/purchases. It could, at some point, add Netflix's app to the platform as part of its Web offerings.
Netflix has a lot to offer, with rights to $7.2 billion in content over the next five years. It also has original programming like "Orange is the New Black" and "House of Cards," which have both turned into major hits.
But Comcast is likely walking a line between offering Netflix as a way of enticing customers, and worrying over whether Netflix will destroy its current business model.
Netflix could also still benefit from the deal if federal regulators were to demand conditions that benefit independent Web services after looking over the final transaction. This could prevent Comcast from charging online companies for access to its Web users.
acquired Time Warner Cable
(TWC) in an all-stock transaction of $45.2 billion earlier this month.
"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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