Netflix seeks to tap final frontier of U.S. devices: the cable box

In the United States, just about any device a consumer can buy at a store and connect to both the Internet and a TV set offers the ability watch Netflix (Nasdaq: NFLX). Game consoles, streaming devices and Blu-ray players all include Netflix apps. But the company has so far left one huge universe of devices untapped--the pay-TV operator-leased set-top box.

For years, the cable boxes leased by operators like Comcast (Nasdaq: CMCSA) and others have been off limits for Netflix. Now reports suggest that could change. Netflix has held discussions with Comcast, the nation's largest cable operator, and the much smaller Suddenlink Communications, about including Netflix software in some of the boxes they lease to subscribers, the Wall Street Journal reported, citing unnamed sources familiar with the matter.

A sticking point in the negotiations is reportedly Netflix's insistence that cable operators which integrate its software also participate in its Open Connect content delivery network, the Journal reported.

Access to cable set-top boxes could make it easier for Netflix to attract and keep customers in the United States. According to the cable trade association NCTA, cable operators have deployed more than 42 million set-top boxes since 2010, when the government began requiring those boxes include a CableCARD. Not all of them are capable of running a Netflix app. But adding Netflix integration to cable devices could tempt some new users to sign up for Netflix's offerings and make it easier for existing customers to watch it on more TV sets in their homes.

The reports follow announcements by two cable operators overseas that they would begin leasing TiVo (Nasdaq: TIVO) boxes that include Netflix apps.

For more:
- the Wall Street Journal had this report (sub. req.)

Related articles:
Netflix boosts resolution for non-Open Connect customers 
Netflix app comes to Virgin Media-leased TiVo boxes 
Netflix says Open Connect partner RCN delivers Netflix best in Boston

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