Comcast has a checkered past when it comes to playing nice with other companies and media outlets. The company has recently announced that it has reached an agreement with Netflix to allow Netflix access over its own X1 platform. Prior to this, Comcast blocked Netflix from its hardware.
The two companies have released a joint statement, saying: “Comcast and Netflix have reached an agreement to incorporate Netflix into X1, providing seamless access to the great content offered by both companies. We have much work to do before the service will be available to consumers later this year. We’ll provide more details at that time.”
The agreement with Comcast is a significant step for Netflix, which has similar arrangements with companies like Roku, Apple, and Google, but has often clashed with ISPs. Comcast, in particular, has been aggressive about locking other companies out from certain devices — HBO Go still isn’t available on the PlayStation 4 if you’re a Comcast subscriber.
So why is Comcast playing ball with Netflix after years of acrimonious debate over carriage fees and pricing? Possibly because it’s trying to get the FCC off its back. The FCC has proposed rules that would require cable providers to ensure interoperability with third-party products, rather than forcing customers to rent set-top boxes for high monthly fees, as Ars Techncia reports. These fees are a huge revenue source for the cable industry and the companies don’t want to give them up. But Comcast’s ability to control which services are available over its own hardware also allows it to enforce a type of vendor lock-in. Cutting a deal with Netflix doesn’t directly address the FCC’s complaints about cable TV behavior, but it signals a willingness to play nicely with others in related areas.
For Netflix, this is an easy win. Direct access through Comcast’s servers means customers can use its products more easily, without trying to configure access through a secondary product or changing inputs to watch streaming TV. For Comcast, the benefits are a bit murkier, especially given that the company has its own less popular streaming service. That’s where the FCC angle comes in. If Comcast can convince the FCC that it shouldn’t be forced to open its set top box service, it can continue to charge a monthly rental fee. According to The Consumerist, Comcast currently charges $10 a month as an HDTV fee; these fees cost US consumers $20 billion per year in total across the industry. As one of the largest cable TV providers in the United States, Comcast reaps a significant percentage of that total — which explains why the company is willing to cooperate with Netflix if it makes the FCC back off.