Oops. Netflix has quickly grown from a nifty little site that streams a bunch of old movies to a game-changing entertainment powerhouse that makes it easier than ever to cut the cord. Long story short, it has become pay TV providers’ worst nightmare. Users love Netflix, investors love Netflix, and the company’s future looks brighter than ever as the cord cutting trend picks up steam.
Typically, service providers try to downplay Netflix’s impact on their business. Of course, one need only look at cable company’s subscriber trends to see how seriously Netflix and similar services are affecting these companies’ bottom lines. In an interesting moment of candor, however, one top cable company lobbyist admitted that Netflix is indeed hurting its business.
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Top Comcast lobbyist David Cohen is very good at… being a lobbyist. If you’re unfamiliar with his masterpieces of fiction, check out this post from back when Cohen said that Comcast’s customer service does a great job “way more than 99%” of the time.
Clearly, Cohen has never had to place a call to Comcast customer service.
Speaking at a panel session during the annual New England Cable & Telecommunications Association conference, Cohen put some nice spin on Netflix’s impact on Comcast’s business. Rather than focus on the fact that subscribers are cutting cable TV at an accelerating rate, Cohen discussed how Netflix is helping boost two of Comcast’s most profitable businesses: content licensing and broadband.
“Remember, you can’t get Netflix without broadband service,” Cohen said while speaking of Netflix’s recent earnings, when the company announced that it added 3 million new subscribers in the second quarter. “Those are 3 million customers of our broadband service.”
In a moment of candor, however, Cohen actually admitted that Netflix actually is hurting Comcast — specifically, he called it a “wound.” He also admitted that it’s Comcast’s own fault, in part, that Netflix has grown to become the powerhouse it is today.
“Part of this is a self-inflicted wound,” Cohen admitted. “We have made video too expensive.”
A recent study found that Netflix continues to have a huge impact on the pay TV industry as it draws households away from pay TV packages and drives them to cut the cord. According to the study, 9% of Netflix subscribers who currently also pay for cable or satellite TV plan to cancel their pay TV subscriptions in the next year, and another 16% are at least considering cutting the cord.