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How Important Are These Telecom and Cable Deals for Netflix?


Aug. 2 2018, Updated 8:01 a.m. ET

Creating opportunities for Netflix

Netflix (NFLX), the leading Internet entertainment operator, has been entering into agreements with various telecommunications and cable operators in the United States as well as globally. Carriers are selling Netflix plans to their subscribers as part of their bundled package deals. The move may help Netflix not only promote its plans to a variety of consumer segments but also make processing easier.

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In April, Comcast’s (CMCSA) Xfinity TV included Netflix video content in its package deal. Comcast believes that at least half of its X1 subscribers use the platform to actively view Netflix. The partnership may help both of them boost subscriber growth. In September 2017, T-Mobile US (TMUS) also teamed-up with Netflix to offer free standard HD[1. high-definition] video service to subscribers with at least two T-Mobile subscription plans.

From the graph above, you can see the total net subscriber growth for Netflix in the last five quarters. The company exited fiscal Q2 2018 with 5.2 million net memberships.

International partnerships

In France, Bouygues Telecom was the first carrier to sign a deal with Netflix, followed by Orange (ORAN), the country’s leading player. A Netflix-Orange deal covers Europe, Africa, and the Middle East.

In India, the country’s leading mobile player Bharti Airtel has started offering Netflix to its subscribers. Vodafone (VOD) India is also providing Netflix content to its RED post-paid customers. Netflix has also signed up with KDDI in Japan and Telefónica (TEF) in Spain and Latin America.

Although Netflix gets most of its members from direct signups, it seems optimistic about these deals in the near future. They could create more opportunities for Netflix to reach every corner of the market.


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