Altogether, the agreement covers as many as 500,000 of the cable firms’ existing subscribers — though that figure could grow as more customers sign up for the offering.
To get the service when it launches Monday, customers must simultaneously subscribe to one of the three cable companies as well as Netflix itself. In addition, the technology requires a TiVo set-top box provided by the cable companies.
Although consumers can currently buy TiVos from retail stores that come with the Netflix app, until now cable-provided boxes lacked the Netflix functionality.
The agreement follows previous experiments by Netflix with pay-TV providers in Denmark, Sweden and the United Kingdom. Analysts said the move reflects Netflix’s broader ambitions to compete with the likes of cable-only services such as HBO.
“The entire cable television market is in the process off reinventing itself,” said Jeff Kagan, an independent telecom analyst. “Watching television on TV used to be the entire pie. Now it’s just one slice of it.”
In order to make the deal possible, Netflix said it had to negotiate with some of its content partners to allow streaming on cable boxes.
“We’re making Netflix a channel on our lineup and in our channel guides,” said David Isenberg, chief marketing officer for Atlantic Broadband. “If you’re an RCN customer, perhaps in the D.C. area, you would pick up your remote control, you would tune to Channel 450, and there you’d find Netflix. You’d select it and that’ll launch the Netflix app. Literally, watching Netflix is as easy as changing the channel.”
Currently, watching Netflix typically requires the use of a separate retail set-top box (such as a Blu-ray DVD player or another Internet-enabled device, such as a Roku). But the Netflix deal, which was years in the making, according to RCN chief executive Jim Holanda, allows Netflix subscribers to watch streaming video without switching devices and remotes.
Netflix’s agreement with RCN, Grande and Atlantic comes weeks after the streaming video service struck a controversial financial agreement with Comcast to ensure a smooth experience for consumers. The two deals, however, are distinct; whereas Netflix is paying Comcast to improve customers’ download speeds and viewing experience, Netflix is still unavailable from Comcast’s own cable box.
Netflix will not manage its cable channel differently from its traditional service, Isenberg said.
More from The Switch: