First Post from class

Today in class my professor for MIS 306 has asked the class to start a blog and post three times a week. So... yeah... here it is. This is my first post. Hope you like Netflix because it looks like they are close to a cable deal with Comcast Corp. and Suddenlink communications. 

http://finance.yahoo.com/news/netflix-pursues-cable-tv-deals-215300236.html

Netflix Inc. is in talks with several U.S. pay-television providers including Comcast Corp. and Suddenlink Communications to make its online video service available as an app on their set-top boxes, people familiar with the matter say.

A deal would mark the online video service's first such tie-up with a U.S. cable provider and would come after a similar agreement it recently announced with U.K. cable operator Virgin Media Inc. The talks are in early stages and no deal is imminent, the people cautioned.

Netflix and U.S. pay-TV companies are rivals in some key respects. Netflix's subscription video offering is an attractive alternative for some consumers who are frustrated with costly cable bills. And both sides want to be the go-to destination for consumers to find on-demand TV programming.

But that hasn't stopped Netflix and U.S. operators from exploring partnerships where it makes sense. The deals they are discussing now would make it possible for cable-TV subscribers to access the Netflix app through newer set-top boxes being deployed.

Currently, customers who want to stream Netflix on their TV sets either need Internet-connected TVs or must switch to a different TV-input to get a Netflix signal from connected devices such as game consoles or Web-TV boxes such as the Apple TV box. Netflix retained its billing relationship with customers in the Virgin Media deal.

A hangup in the talks with at least two operators is that Netflix is insisting that they also take on its special technology designed to improve the delivery of its streaming video, people familiar with the matter say. The technology is part of its Open Connect program and consists of special servers Netflix wants to connect directly into broadband providers' networks. Netflix believes the technology is critical to make sure its service provides the best quality to viewers, the people say.

So far, Internet providers Comcast, Time Warner Cable Inc., AT&T Inc. and Verizon Communications Inc. have declined to use the technology, concerned that such an arrangement could lead other online services to ask for special treatment, the people familiar with the matter say. The Internet providers argue their broadband networks are fully capable of handling Netflix traffic, the people say.

For years, several U.S. pay-TV providers have been fearful of a linkup with Netflix, worrying the online TV service could lure eyeballs away from their own video services. But some cable operators have warmed to the idea, in part because of improved set-top-box technology and because they believe Netflix users are more likely to buy more expensive, faster broadband connections.

Netflix until this summer had programming contracts with entertainment companies that made such deals difficult to strike in the U.S., people familiar with the matter say. But recently, media companies have become more comfortable with the prospect, and Netflix has been able to negotiate out of those old restrictions.

Some operators also are interested in the added leverage a tie-up with Netflix could afford them during carriage-fee disputes with TV channels. If Netflix's library had old seasons of programming from a channel, then in the event of a channel blackout, an operator could point its customers to Netflix as an alternative.

Still, there are potential stumbling blocks in the negotiations. A concern for at least one operator is that Netflix could eventually use the app as a "Trojan Horse" to sell pay-per-view movies or other services that compete directly with the operator's video offerings, the people familiar with the matter say.

At a recent investor conference, Netflix Chief Financial Officer David Wells said the company would "love to reduce the friction to the end consumer" by being available on cable set-top boxes. It is up to pay-TV operators, he said, "to decide how much of a competitor they view us as or a complement."

Comcast, the largest U.S. pay-TV provider, earlier this year said it had no plans to add apps from online video services to its new Internet-connected set-top box, dubbed X1. But since rolling out the box in many markets this year, Comcast has become more open to having such conversations, people familiar with the matter say. Comcast is in talks with several other online video services about app deals for its set-top box, some of the people say.

Adding a Netflix app would be the latest move by pay-TV operators to transform set-top boxes from clunky devices into Internet-connected gadgets that are easy to use and come with popular consumer offerings.

DirecTV and Verizon's FiOS have also connected their newest boxes to the Internet, allowing users to access apps such as YouTube. Neither has a deal with Netflix. Time Warner Cable and Cox Communications Inc. have also talked to YouTube about carrying its app on their set-top boxes, people familiar with the matter say.