According to the latest reports, Comcast and Netflix have reached an agreement over the X1 platform.
Cable giant Comcast had previously refused to allow Netflix to share content on its set-top box. Now a report in Recode reveals that a deal has been reached.
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Agreement makes sense for both Comcast and Netflix
A statement from the two companies said: “Comcast and Netflix have reached an agreement to incorporate Netflix into X1, providing seamless access to the great content offered by both companies. We have much work to do before the service will be available to consumers later this year. We’ll provide more details at that time.”
Sources claim that the deal is likely similar to previous agreements that Netflix has reached with other cable companies in the United States and around the world. The deal will mean that a Netflix app now appears on the X1 set-top box platform, making it easier for Netflix users to log in to their account.
Netflix has deals with Apple, Roku and Google’s Chromecast, while it is also present in smart televisions. Morgan Stanley previously released a report on the potential benefits of a deal, noting that Comcast could earn money from Netflix if it adds subscribers.
Morgan Stanley report previously outlined benefits
It also said that Comcast would become more competitive compared to Roku, Verizon and Dish, rival services that already have apps from Hulu and Netflix. Netflix could benefit from new subscribers and reach a wider range of consumers.
Benjamin Swinburne of Morgan Stanley wrote: “We would expect Netflix to give up some economics, similar to other distribution partners like Apple or TiVo but we do not believe it would meaningfully alter the direction of Netflix profits over time. Payments to distribution partners are reported in marketing expenses on Netflix’s consolidated financials.”
Swinburne said that Comcast’s pay-per-view business could suffer, although not to any great extent. Neither company was prepared to comment on the exact financial terms of the deal, but it marks a major development after years of sometimes contentious relations.
The deal shows that Comcast is more open to competitors and that the X1 box can be considered a web video platform rather than a simple cable box.