Cable operators on Netflix: to bill or not to bill

A panel of senior cable executives at Cable Congress in Dublin have expressed a range of opinions on how far it makes sense to embrace and integrate Netflix as part of their TV offerings, with views on the merits of billing integration and the impact of Netflix on the appeal of TV services differing between operators.

Manuel Cubero, chief commercial officer, Vodafone Germany, said that Vodafone had increasingly integrated “more and more services” into its cable TV offering, including Netflix, an approach to content that made more sense than, for example investing in original content itself. “We see ourselves as aggregators of SVOD services and channels,” he said.

Cubero said that Vodafone did not compete directly with content players – including Sky, with which it has an amicable relationship that enables Vodafone subscriber to access Sky premium content including Bundesliga football. He said this approach made sense as Sky had not, for example, sought to compete head on with Vodafone in broadband, at least until now.

Cubero said that Vodafone was focused on offering its own integrated TV product, GigaTV. He said that the company had commercial deals with SVOD players similar to the carriage fee model.

Tony Hanway, CEO Virgin Media Ireland, speaking on the same panel session at Cable Congress, said that Irish consumers “devour” British and American content, so accessing Netflix as a channel made sense. Netflix was now the third most-watched channel on the EPG, he said, but its inclusion in the TV offering had not created a spike in Netflix viewing or a decline in viewing of other channels. “We haven’t seen cannibalisation, “ he said.

Hanway said on the other hand that he was “not keen” on billing integration with Netflix, which might simply be perceived by consumers as a larger Virgin Media bill rather than a bill associated with their consumption of Netflix.

Robert Redeleanu,CEO of Liberty Global-owned UPC Romania and UPC Hungary said that Liberty had a relationship with Netflix. However, he added, there remains work to be done as Netflix is not localised in many CEE countries and ARPU is not particularly high in this region, so adding a Netflix subscription is less appealing to lower income CEE families. Liberty also offers its own TVOD and SVOD services at a more affordable price across the region, he said.

Timm Degenhardt, CEO of German cable operator Tele Columbus demurred from the consensus, arguing that integration of Netflix in the EPG was not necessarily “the way to go” because consumers often viewed the service on non-TV devices. He said on the other hand that billing integration was potentially more interesting for Tele Columbus.