Netflix integration good for pay-TV operators, IHS says

The 25 pay-TV operators who integrate Netflix (NASDAQ: NFLX) into the user experience they offer their video customers get more benefit than harm out of the partnership.

So says research firm IHS in a newly published report called Netflix on Pay TV: A Marriage of Convenience.

After interviewing executives "across the pay-TV value chain," IHS Technology Research Director Ted Hall said: "Many of the operators working with Netflix have seen customer satisfaction ratings improve under the partnerships, which have helped foster positive operational performances."

Hall said operators are receiving little in the way of revenue sharing from Netflix. Most of their customers either already have a Netflix account or sign up for one via a more "user friendly" platform, like a laptop.

"Netflix is a both less lucrative and more dangerous content partner to work with than the other premium networks pay TV providers traditionally partner with, such as HBO," Hall said. "But collaborating with the ever-popular streaming service is necessary for many operators positioning their platforms as one-stop-shop ecosystems for TV and video content."

Hall also pointed to possible up-selling opportunities for operators. Dish Network (NASDAQ: DISH), for example, is enticing customers to its third-generation Hopper DVR with Netflix integration. 

"Netflix plays at least some – likely small – role as an up-sell driver for some operators, whose customers can only access the app via their most advanced set-top boxes," Hall said. "This is the case for 10 of Netflix's 25 operator partners, primarily those using TiVo as their technology partner, in addition to Orange, Bouygues and Elisa."

For more:
- read this IHS press release

Related articles:
SVOD use keeps growing as 57 percent of U.S. homes subscribe to Big Three, study says
Dish becomes first major operator to integrate Netflix into set-tops

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