Netflix execs may insist publicly that they&39;re no threat to cable, but there&39;s plenty of evidence that the company&39;s subscription service and pay TV offerings are squarely competing for the eye balls and subscription.
Not convinced yet? Then consider this evidence:
Consumers are ready to jump ship. Netflix users that stream the companys videos to connected devices are twice as likely to at least downgrade, if not outright cancel their cable TV subscription than they were just a year ago, according to a new study from The Diffusion Group (TDG). Thirty-two percent of these Netflix users are thinking about calling their cable company. Despite its rhetorical positioning, both Netflix and Pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to Pay TV subscription levels, said TDGs Michael Greeson. In other words: In the long run, Netflix will inevitably lead to cord cutting.
Content licensing is getting more competitive. Netflix Chief Content Officer Ted Sarandos revealed recently that Netflix is now at the table for pretty much any TV licensing deal. So why arent Netflix customers buying more content? Because some of the networks simply dont like to share. Netflix would prefer cheaper, non-exclusive licensing deals, which would make it possible to get more bang for its buck. However, HBOand increasingly Showtime are insisting on exclusive content to prevent subscribers from jumping ship.