Netflix (NASDAQ: NFLX) has become such a powerful programming force, MVPDs are now using it to market their wares instead of their own programming bundles.
That's the compelling thesis of a Monday BTIG Research blog post from analyst Richard Greenfield, who takes aim at a new Verizon FiOS (NYSE: VZ) promotion that puts Netflix at the heart of a triple-play service offering.
Verizon's promotion--which the company says is limited to the New York DMA (designated market area) and runs from Oct. 22 to Nov. 1--offers 75 Mbps symmetrical broadband, a $150 Visa gift card and a year of free Netflix.
The accompanying TV ad even features a couple settling in to watch the Netflix original series Orange Is the New Black. In fact, Netflix is mentioned five times during the commercial.
"It has become quite clear that every content creator/programmer is now willing to sell their best product to Netflix (whether it be new or syndicated series)," Greenfield writes. "Content owners are trying to offset or at least mitigate the impact from what appears to be a fundamental change in how consumers watch television (meaning not live), a softening in the TV advertising market as TV ads are no longer 'special,' and the slow subscriber decline/shrinking bundles of multichannel television. Now we are seeing distributors increasingly focused on marketing Netflix…"
For its part, Verizon responded that the New York DMA was chosen for "its highly competitive nature and based on the latest Netflix report on ISP results, which moved us to number one for performance. The thought is that this is a good combination to trial and a good market to try it in."
- read this BTIG Research post (sub. req.)
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