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Netflix Disrupts TV Again, Will Traditional Cable Raise The White Flag?

James Dennin, Kapitall: Netflix is reportedly in talks with cable providers to stream directly to cable sets. Does this mean they've won?

Multiple sources are now reporting that the online streaming website Netflix (NFLX) might soon beam content straight to your television set. First they successfully partnered with the British cable provider Virgin Media, in a deal that would run Netflix straight through to the televisions of UK viewers with a TiVo box.

Now Netflix is turning its attention to making a similar arrangement with American cable providers.

Talks are still underway, supposedly between representatives from Netflix and two of the largest cable providers in the US, Comcast (CMCSA) and Time Warner (TWX). The deal would further blur the lines between traditional television and the new streaming websites that compete with, alongside, above, basically all around them. 

The move illustrates two important trends:

  • The increasing pressure for television providers to provide on-demand content for younger viewers.
  • The continuing resilience of traditional TV among older, and wealthier customers.

The fact that cable companies may soon have to liaise directly with the products that threaten to put them out of business further demonstrates the increasing importance of the internet – while also making the "disruptive" product more and more like the products it threatens. 

This comes at a time when a number of media companies have begun exploring new partnerships as a way to buoy falling revenues. One of the largest cable providers in the country, Comcast has recently partnered with the social networking giant Twitter in an effort to streamline television-related tweets into a special service called "See It."

The service will allow people to tweet directly at TV shows, and use social networking data to track ratings for advertisers. While only content from Comcast networks will appear on the feed initially, representatives from Twitter are supposedly courting other networks as well.    

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