November 30, 2017
Comcast and Charter Communications are reportedly in talks with Hulu to offer its on-demand content via their set-top boxes. Currently, Comcast offers Dish Network’s Sling TV, Netflix and YouTube with its X1 service, which offers voice-activated search for movies and TV shows. Comcast’s goal is to become a “one-stop shop” for digital video services, says company executive vice president Matt Strauss. Sources say that Charter is also on track to add Netflix via a new user interface for web video.
Bloomberg reports that, according to another source, “Altice USA, the fourth-largest U.S. cable provider, is also in talks with Netflix.” Altice currently offers, via its Altice One Cable system, Pandora streaming music and YouTube videos.
These examples are an indication that pay-TV companies no longer regard streaming services as “existential threats to their business,” but instead see them as a way to “stay relevant.” Cable providers are also offering new user guides that resemble “an iPhone or tablet screen, with tiles featuring various apps,” rather than a grid, to streamline the experience of “juggling remote controls or toggling between applications.”
To that end, Comcast is also “testing an app that lets subscribers access their cable service through Roku’s set-top boxes.”
Integrating new apps requires complex negotiations, including “how to split revenue from new subscribers and who has access to viewer data.” There is a risk that viewers who spend a great deal of time watching Netflix or Hulu could “lead them to question why they’re still paying for cable,” but it is likely better for retention.
That’s relevant to Comcast, which lost 125,000 customers last quarter, and Charter, which lost 104,000 subscribers. Netflix, meanwhile, continues to ink deals, recently with “several telecommunications companies and pay-TV providers outside the U.S.,” including Deutsche Telekom.
With the new deals, Hulu, owned by four media companies including Comcast, will “get its videos in front of more people” and help it “tap into the $63 billion TV advertising market.” Netflix chief executive Reed Hastings said last year that a Comcast deal “was unlikely to boost his subscribers much because most Comcast customers already have the service” but that the deal “increases the word-of-mouth” and makes Netflix “easier to use.”