Netflix-on-cable: Possibly the only way to millions of STBs—TODAY!

Murali Nemani — CMO

Let’s start with some assumptions: You’ve read that talks are underway to bring Netflix to cable set-top boxes in the U.S.  You understand how it can help Netflix expand its footprint and bring new original and long-tail content to cable.  You may even know that a key discussion point is Netflix’s interest in installing its own OpenConnect caching system within U.S. operators’ networks.

Amidst all the stories and analysis over the past week, two critical points are getting lost:

  • First, no matter what kind of agreements may be struck between Netflix and cable, the total market impact will be small, for one simple reason:  The hundreds of millions of set-top boxes already in the field simply lack the resources to deliver TV-as-an-app services, and for the few next-generation boxes that can, user experiences must be written multiple times.
  • Second, even though Netflix can point to installations of OpenConnect in cable operator facilities in Europe, there’s no reason for the OpenConnect debate to impede negotiations here.  An alternative would be to enable cable access to existing Netflix edge servers and support streaming of the full Netflix experience to any STB or connected device.

For Netflix-on-cable to be truly a success, it’s not enough to replicate the existing Web paradigm within cable networks and on next-generation STBs.  What’s needed is a new approach that allows pay-TV operators and Netflix to do two things:  1) decouple the user experience from device limitations by moving the browser to the cloud; and 2) stream the full Netflix user experience as an app via the existing QAM or IP network—not just to a few hundred thousand high-end boxes, but to every one of the millions of STBs in the operator’s footprint.

A cloud-based platform like CloudTV™ can combine HTML5 app development and delivery of content as MPEG-2, H.264 or H.265 video to any STB or connected device. For operators and Netflix, this means:

  • Re-packaging of Netflix web video and delivery over existing service provider infrastructure—eliminating need for caching systems, significantly reducing peering costs for operators and using existing DRM;
  • Delivery of optimal consumer experiences by making not just any Netflix interface, but rather Netflix’s premierXbox 360interface available on any STB; and
  • Acceleration of service availability without the cost and time to market of deploying next-generation set-top boxes costing hundreds of dollars.

Let’s be realistic:  While the limited deployments in Europe are paving the way, there still are plenty of points to be resolved before Netflix makes an appearance on U.S. cable systems.  We’re not going to wade into the weeds of who owns the UI or who controls the data or what the revenue models will look like or any of the other business issues that must be negotiated.

What we are in a position to say is this:  overcoming the primary technology impediments of a Netflix-cable deal and enabling a rollout to tens of millions of homes today can be done quickly and efficiently—simply by moving the Netflix user experience to the cloud.