Netflix’s Very Big Deal

Dish Network last week announced that it had integrated the Netflix app into its set-top box. The video streaming service is now available to Dish subscribers with a second-generation Hopper Whole-Home HD DVR.

This integration of the services allows Dish customers the ability to stream Netflix movies and TV shows from the same platform that is used to access linear TV channels.

“Pairing Netflix with Hopper represents the consolidation of two incredible video experiences,” said Vivek Khemka, Dish senior vice president of product management.

“This app integration eliminates the need to switch television inputs to access content on varying devices,” Khemka added. “It gives our customers easy access to their favorite shows and movies, on both Dish and Netflix, without ever having to leave their Hopper.”

OTT to the Box

This new partnership essentially brings Netflix, which has been a leader in the over-the-top (OTT) category, to a traditional set-top box platform. This means that Dish subscribers can switch to Netflix content using the same device, same remote control, and same video input as they would for watching content on Dish.

Despite this greater integration, Netflix will still carry a subscription, and Netflix search results will not be integrated into the Hopper’s native search, at least for now. Dish has suggested that titles on Netflix could be integrated into the Hopper’s search functionality, though.

“Since many households subscribe to both Netflix and a traditional pay-TV service, the new Dish-Netflix relationship will give customers easy access to a wide variety of complementary programming,” said Susan Schreiner, an analyst at C4 Trends.

“A new paradigm for demand content is about to disrupt the entertainment ecosystem, given the combination of Dish’s robust video entertainment experience across TV shows, live TV and movies, coupled with Netflix’s vast library and household penetration in the U.S.,” she told the E-Commerce Times.

First American Deal

While this news marks the first such deal for Netflix to be integrated with a pay-TV service in the U.S., it did have prior deal in the UK, noted Richard Cooper, director of video media at IHS Technology.

“In the UK, Netflix started this strategy with Virgin Media last year,” he told the E-Commerce Times. “This latest deal just signals that Netflix is looking to compete with premium media channels — and with this deal, it can reach 14 million Dish subscribers.

“For Dish, it adds the huge content that Netflix offers,” Cooper added.

Netflix Broadens Its Reach

Because Netflix has operated as an OTT service, it has required that its subscribers have some device — such as a supported game console, Blu-ray player or streaming video stick — to receive the content. This assimilation into an actual set-top box could be a major game changer for the company.

“For as long as Netflix’s streaming has existed, subscribers have needed to watch it either through a mobile device, or a Roku/Apple TV/Chromecast device, or a gaming console, but never through their cable box,” said Schreiner.

“They (Netflix) are keen to progress from an OTT environment to reaching everyone with a TV set,” said Cooper.

“That has been part of their ongoing strategy; to move away from secondary screens such as computer monitors and tablets and reach the principal display in the home,” he noted.

“This increases their reach as a premium TV provider,” added Cooper.

Video Disruption

While this deal no doubt will increase Netflix’s reach, it also could radically change the premium video market in other ways.

“The way in which audiences consume movies and television is now entering a new era of disruption,” suggested Schreiner.

“It will be interesting to assess the repercussions and transformation from the Dish-Netflix relationship across the ecosystem — as well as the momentum of Netflix and its other recent deals, like its recent deal with CBS,” she added.

“While Netflix could offer a cost-effective way for telcos to compete with cable and satellite and deliver attractive premium content,” she suggested, it “might it also constrain telcos [and cable providers] into becoming dumb pipes.”