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This integration is particularly noteworthy given how tense the relationship between Comcast and Netflix has been in the past. In 2014, the two companies struggled to reach a deal that would allow Netflix to connect its servers free of charge to Comcast\u2019s network(3)<\/sup>. After Netflix service levels\u00a0to\u00a0Comcast Internet subscribers deteriorated, the companies eventually reached an agreement in which Netflix would pay the Internet Service Provider for access to its network(3)<\/sup>. Despite the fact that the companies ultimately did reach this paid-peering agreement, Netflix still harbored bad blood toward Comcast and feared the cable behemoth\u2019s market power. In the months after this agreement was reached, Netflix voiced concern over Comcast\u2019s proposed acquisition of Time Warner Cable(4)<\/sup>. The deal was ultimately blocked by the FCC.<\/p>\n The integration of Netflix into Comcast\u2019s X1 set-top box marks a new, more cooperative chapter in the relationship between the two companies. Comcast has clearly recognized consumers\u2019 demand for streaming services and committed to incorporating, streaming, commercial-free offerings, like Netflix, into its video product. This partnership exemplifies the rare case of an incumbent player, Comcast, adopting its business to the rise of a new technology, streaming video services. Comcast sees that as technology has enabled the proliferation of streaming video, consumers are shifting their viewing patterns away from traditional media networks and towards streaming services. Comcast realizes that to maintain its dominant position as an aggregator and distributor of video content it needs to incorporate streaming services into its product offering. Comcast has astutely shifted its perception of Netflix. The company has attempted to see Netflix as a partner in sourcing content as opposed to a competing distribution network that leeches off of Comcast\u2019s physical cable network.<\/p>\n Moreover, this integration is a tremendous boon to consumers. While before consumers had to toggle between the TV guide and an AppleTV or Roku product to alternate viewing Netflix content and content aired on traditional media networks, on the new Comcast box, no toggling is necessary. Going from watching House of Cards<\/em> on Netflix to The Big Bang Theory<\/em> on CBS can be done as easily as flipping the channel from CBS to NBC.<\/p>\n Moving forward, Comcast should pursue arrangements with other streaming services. Comcast\u2019s partnership with Netflix does not change the fact that consumers increasingly prefer to watch commercial-free streaming content instead of advertising laden shows on traditional media networks. To truly please the next generation of consumers and maintain its dominant position as an aggregator, Comcast\u2019s video service needs to aggregate\u00a0far more streaming platforms, such as Hulu, HBO GO, and CBS All Access,\u00a0and promote far fewer commercial-filled traditional channels. Today, Comcast is undoubtedly a leading aggregator and distributor of traditional video content. However, if Comcast can continue to add streaming offerings, like Netflix, to its video product, the company can establish itself as a leading aggregator and distributor of streaming content. In doing so, the company will position itself to meet the needs of the next generation of consumers.<\/p>\n Word Count:719<\/p>\n Comcast's integration of Netflix into its set-top box is the rare example of a dominant, incumbent player future-proofing its business<\/p>\n","protected":false},"author":2075,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[1711,2187,2270,2500,869,525,2411,145,143,390,283],"class_list":["post-18249","hck-submission","type-hck-submission","status-publish","hentry","category-adaptation","category-content","category-digital-disruption","category-digital-media","category-disintermediation","category-disruption","category-incumbent","category-media","category-netflix","category-pay-tv","category-tv"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\n\n