Putting an end to a long-time rivalry, Netflix (NASDAQ:NFLX), the movie and television streaming service, will soon be included in the cable TV package provided by Comcast Corp (NASDAQ:CMCSA), which is the U.S.’s largest cable television group.
“Netflix offers one of the most popular on-demand services and is an important supplement to the content offering and value proposition of the X1 platform,” said Sam Schwartz, chief business development officer with Comcast Cable. “Netflix is a great partner, and we are excited to offer its services to our customers in new ways that provide them with more choice, value and flexibility."
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But just a few years ago, Comcast and Netflix were at war with each other over so-called bandwidth-usage payments. Netflix “reluctantly” agreed to pay Comcast for dedicated internet bandwidth and then accused the cable provider of “extortion” in asking for such fees, according to an article in The Hollywood Reporter.
News of Netflix's deal with Comcast comes on the same day as Netflix’s shares have been raised to a Buy from a hold by Bryan Kraft, a Deutsche Bank analyst who attributed the upgrade to Netflix’s “significant lead” over its industry rivals.
“What’s evolved with respect to our view on the stock is that Netflix has changed the industry in a profound way and in doing so has given itself a significant lead, making it very difficult for the traditional media companies, or even other big tech companies, to catch up," he wrote in a note to investors, which was obtained by The Fly, a business news site.
Netflix shares inched up 2% to US$315.30 shortly after the opening bell on Wall Street. Comcast shares were flat at US$33.20.