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Netflix, Cable Looking For Ways To Work Together

Streaming service seems to be cutting into cable viewers

A company that started because someone got a late fee on a rental of "Apollo 13" now has to find a way to co-exist with television, or it could ultimately kill cable television as we know it.

That's the news coming after a new study by The Diffusion Group shows that a third of people who use Netflix's streaming service are likely to drop at least some of their pay television services.

That's not good news for cable, especially premium cable outlets like HBO, Showtime and Starz, which offer original programming to help entice cable watchers to pay more for what they get. Many people are finding what they want instantly in Netflix's on-demand streaming service, which is available through an inexpensive per-month subscription rate rather than per episode.

The survey of random adult broadband customers showed that 32 percent were likely to downgrade their premium cable services, doubling the number that said they would do it the year before when Netflix streaming was just starting to gain traction, according to The Wrap.

What does that mean? It looks like cable and Netflix will have to find a way to better work together. Already, premium cable channels make sure their programs are not available on Netflix streaming -- sometimes more than a year after they originally air on the cable channels. That means shows like "Game of Thrones," "Dexter" and "True Blood" are at least 12 months behind in many cases.

Yet, it's not clear how much of an impact that's making. With the wide variety of television programs available through Netflix's streaming service (including, for example, the full series of "Lost," and soon many of the Star Trek spinoffs), some are finding there is plenty to watch while they wait for premium cable shows to slowly make their way to Netflix.

It doesn't mean that cable channels aren't getting a piece of the action. Netflix, in recent months, have paid millions of dollars to gain access to television shows and have them hosted on its streaming service. Despite the payouts and the low subscription costs, Netflix has remained profitable, in fact doubling its profits in the first three months of 2011 compared to the year before (at more than $1 per share).

But while Netflix makes for a great scapegoat on what's happening to premium cable, it's not the only thing affecting whether people will pay for more television or not. Many people surveyed said it's more about the cost of service and a need to save money in a tough economy that's affecting their decision, although having Netflix available is a good, cheaper alternative.

About the Author

Michael Hinman is the founder and editor-in-chief for Airlock Alpha and the entire GenreNexus. He owns Nexus Media Group Inc., the parent corporation of the GenreNexus and is a veteran print journalist. He lives in Tampa, Fla.
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