In research presented at the IHS Technology London Media Seminar last week, IHS senior principal analyst, Ted Hall, said that Netflix’s pay TV partners are typically operators that do not have significant direct interests in content themselves.
He said that Netflix deals were not necessarily appropriate for all types of operator, as pay TV companies that hold exclusive content rights and strong market positions better able to compete with their own pay TV SVOD services.
Hall said that for pay TV operators the “risks and implications” of partnering with Netflix include the reduction of transactional video-on-demand (TVOD) consumption and cannibalisation of an operator’s own SVOD offering.
The diminishing appeal of premium movie channels was also cited as a potential pitfall. Hall said that to date there is no evidence that ‘cord shaving’ in this area is taking place in Europe, but in the US “some major premium movie channels are struggling to increase subscribers.”
European pay TV providers that have integrated Netflix into their platforms include Virgin Media, BT TV and Com Hem.