By Steve Rothwell
NEW YORK -- Netflix (NFLX) has reached a deal with Comcast (CMCSA) to ensure that its TV shows and movies are streamed smoothly to households, the first deal the online video streaming service has reached with an Internet service provider.
The two companies said in a joint statement Sunday they're establishing a more direct connection to provide a better service to customers that will also allow for future growth in Netflix traffic. The companies say the arrangement is already giving customers a better experience.
Netflix had 33 million U.S. streaming subscribers at the start of the year and accounts for about a third of all traffic on the Internet, according to research firm Sandvine. As the video steaming company has grown, Internet service providers like Comcast have pushed the company for more structured deals to enable its content to be transmitted smoothly and reduce the strain on their networks.While the companies did not disclose the terms of the deal, Netflix investors will want to know how much this deal will affect the company's bottom line and whether the costs will be passed on customers. Netflix has been resisting paying fees to Internet companies, and this deal could open the door to similar deals with other providers. Netflix is already experimenting with different rate plans that charge slightly more for households that want to stream its shows and movies on four different screens simultaneously. The deal comes after months of collaboration with Comcast, though Netflix will receive no preferential network treatment under the multiyear deal, the statement said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV