Yes, Netflix will soon be offered on Comcast's X1 set-top boxes.
News about the two archnemesis striking a deal may be surprising to many, especially those who have been following the drama unfold between them, but this is actually good news. A win-win situation, even.
Online streaming services like Netflix and Hulu are slowly changing the game for consumers who want easy access to great TV-style content, so it's natural for a cable TV provider like Comcast to feel threatened (even slightly) by such presence. The convenience Netflix offers has given rise to "cord cutters," or customers who are discontinuing their cable TV subscription in favor of online streaming.
The move is all about "providing seamless access to the great content offered by both companies," the two groups announce in a joint statement. Details have yet to be released and there is still "much work to do" before the service becomes available to subscribers later this year. But the agreement is already earning praise.
Suddenly finding the Netflix app offered through a set-top box shows a classic case of symbiosis in a highly competitive market.
How The Deal Benefits Comcast
Out of Comcast's 22.4 million video subscribers, more than a third own the X1 set-top box from the company's Xfinity service. Comcast touts X1 as the "next generation" of cable TV viewing because it offers an interactive experience, unlike that clunky cable box of old.
With Netflix on board the service, Comcast subscribers can simply click on the app to access content. This strategy could help prevent cable TV subscribers from cutting the cord and opting for online streaming for good.
But even if customers do jump ship, Comcast could still profit from these premium X1 set-top boxes carrying the app.
This partnership with Netflix may also prove to the Federal Communications Commission (FCC) that Comcast is friendly to competitors. FCC Chairman Tom Wheeler has long wanted cable TV providers to give other services access to their set-top box platforms. The X1 therefore offers as a more level playing field, where even rivals like Netflix can maintain a presence.
How The Deal Benefits Netflix
Comcast is undoubtedly Netflix's biggest partner yet. The cable TV provider earned $18.8 billion in revenue in the first quarter of 2016. With the deal in place, Netflix would contribute to Comcast's earnings and, out of it, also take home a significant slice of the profits.
While Netflix has a user base of 81 million, it only raked in a revenue of $1.8 billion during the same quarter. The streaming service is initially targeting 2.5 million new members in Q2.
As the X1 set-top box becomes compatible with Netflix, that figure will increase. Netflix will gain wider exposure to an audience of about 7.6 million.
In the end, however, convenience and a wide array of high-quality content make this deal a win-win situation most importantly for the customers.
