October 30, 2014
Verizon and Netflix are quietly testing a plan that could lead to an industry first regarding a major MVPD offering the SVOD service as part of a bundled subscription. Verizon is offering new FiOS Triple Play customers in New York City a free year’s worth of Netflix (a $108 value). The trial follows the back-and-forth between Verizon and Netflix contentiously debating which company was to blame for buffering problems that eventually led to a peering deal with Netflix paying extra fees.
According to Home Media Magazine, the “campaign marks the first time a major multichannel video program distributor in the United States is offering direct access (and free) to a heretofore over-the-top video competitor.”
“MVPDs — notably Comcast — have been loathe to even entertain the idea of offering easier access to Netflix to their subscribers. Indeed, Comcast was the first major ISP to ‘corner’ Netflix into paying higher fees to ensure its subs got the fastest streaming speeds possible. A peering deal, among others, the Federal Communications Commission is now investigating.”
As the landscape continues to change regarding how consumers access their media, the Leichtman Research Group recently noted that there are now more broadband subscribers than video in the U.S.
In addition, services including Netflix, Amazon Prime Instant Video and Hulu Plus may soon be impacted by standalone streaming services from the likes of CBS, HBO and Lionsgate.
According to BTIG Research analyst Richard Greenfield, Verizon explained that the promotion is limited to New York and ends November 1.
“However Netflix’s partnering with a major MVPD in the U.S. evolves, the practice has become more commonplace in Europe,” reports Home Media Magazine. “The SVOD last year inked partnerships with Virgin Media in the United Kingdom, in addition to separate deals in Scandinavia and most recently in western Europe where it launched service in France, Germany, Belgium, Austria, Switzerland and Luxembourg.”
14 Percent of Broadband Homes Don’t Take Pay TV: Study, Multichannel News, 10/28/14