Netflix Becomes Cable Show’s Obsession

Rental site's rise as streaming video giant irritates an industry

After two days it's clear that the great obsession of this Cable show is Netflix. It is the bogeyman of Chicago, the company that keeps coming up again and again and again over coffee, in meetings, and during panel discussions on nearly every industry-related topic.

Yesterday, it started first thing in the morning when Michael Willner, CEO of cable provider Insight Communications, took a swipe at the Netflix business model. “Cheapness and what we’re providing don’t necessarily go hand in hand,” he said. “Netflix is probably the best example of an application that requires a ‘fat’ [broadband] pipe … If they want to compete, Netflix will have to charge prices that are comparable to our services.”

It was the second day in a row that a cable chief took the opportunity to denigrate Netflix in public—yesterday, Viacom chief Philippe Dauman dismissed the service as little more than a provider of “library programming.”

There has been ample talk here in Chicago of the various ways in which the cable industry can adapt to the changing video landscape. TV Everywhere is imminent, most say, and new set-top-box technologies will be able to much more seamlessly blend online video and traditional linear television. But there has been almost as much discussion of the competition in the last two days—and of Netflix in particular, as if it were the one company threatening to bring down an entire industry.

One possible explanation for the cascade of disparagement: cable companies – and in particular network programmers, sense that they could soon be competing with streaming online video sites like Netflix much more directly in a traditional television environment. “There’s a mystery about what Hulu and Netflix are,” said Melinda Witmer, Chief Programming Officer at Time Warner Cable, during a TV Everywhere panel discussion yesterday afternoon.

“They look to me like programmers … My question is ‘when are they going to ride on the set-top box?” Allan Singer, Senior Vice President of Programming at Charter Communications put it more directly: “Netflix is just going to be another content opportunity that we’re eventually going to give our customers.”