2. Netflix Tamps Down Cord-Cutting Fears

Another unexpected item this week was Netflix dedicating a section of their Q1 '11 report to tamping down fears of cord-cutting that have been aroused due to Netflix's own staggering growth. To my knowledge, Netflix has never suggested in the past that it would prompt cord-cutting, but it has periodically positioned itself as a competitor to pay-TV services. Now however, Netflix is firmly embracing a "we're supplemental to pay-TV" positioning.

Why? My guess is that Netflix has gotten the message that contributing to the potential ruin of the multi-billion dollar pay-TV industry hurts their studio and network partners, and will only undermine Netflix's content acquisition efforts over time. If industry observers or others want to link Netflix's growth to cord-cutting so be it; Netflix now seems to be saying, "we're not going to play that game." That's fine, but as I've suggested in the past, for entertainment-oriented and budget-minded consumers, there's no question that Netflix, when combined with other services, is emerging as a viable alternative to pay-TV. This is particularly true for the younger generation of "cord-nevers," kids coming out of college who don't see a pay-TV subscription as a must.

Categories: Aggregators

Topics: Netflix