Today’s development in weird potential frenemy relationships is an interesting one with Comcast now planning to bundle Netflix into its cable subscriptions, the companies announced today.
Known as the original cord-cutting service, Netflix serves as a hub for not only a ton of original content, but also a huge catalog of movies and shows that offer a near-endless flow of entertainment for the average user for less than $15 a month. Comcast added Netflix to its X1 interface starting in 2016, but it appears that the success of this among traditional cable subscribers may have encouraged Netflix to begin working more closely as it tries to tap more and more consumers.
The companies said they will expand that existing relationship by bundling Netflix into the overall subscription in new and existing Xfinity packages. Netflix’s subscriber growth — the primary driver of its value as a public company — continues to surge, and it appears that this could be another piece in its tool kit to keep that engine humming. Those cable packages already include an increasing breakout of diverse services that allow for streaming outside of the over-the-top experience, like HBO Go and ESPN, and this offers another streaming service on-the-go for users.
By tethering to additional over-the-top services, Netflix has a chance to woo subscribers that might otherwise just stick with their existing service providers and bake itself directly into that experience. These kinds of cross-platform subscriptions are becoming a little more common and a big driver of user growth — for example, Spotify works with Hulu to create a multi-service subscription that ends up, on paper, with more users for both. Getting that taste may also encourage users to eventually graduate onto the service directly and drive additional revenue for those companies.
Whenever Netflix reports its quarterly earnings, all eyes are typically on that subscriber number. It’s the leading indicator for the company’s growth, even as it spends more and more money on original content to acquire subscribers. But by getting into the cable bundle, Netflix can find a way to get that content into the hands of subscribers that may one day cut the cable as more and more streaming options emerge for the content they typically want. ESPN is already dipping its toes into the streaming side with ESPN+, which while limited signals an opportunity to break out and attract those consumers that aren’t interested in a cable bundle.
The bundle, which will be available to new and existing Xfinity customers, will be included in its cable TV, phone and internet plans. It seemed throughout the lifetime of Netflix’s streaming expansion that it would be the harbinger for cord-cutting, but now finds itself fitting with existing consumers that already are fine with a cable subscription.
