Netflix Scores Another Pay-TV Deal

Netflix has confirmed reports that Danish triple-play service operator Waoo! has completed an integration that will allow it to offer access to the Netflix app on leased set-top boxes.

Waoo! has posted details about its Netflix handiwork on its Web site alongside a formal announcement (here’s a link to the page translated into English), noting that Netflix will retain its billing relationship with the subscriber.

"From an international perspective, we're a small company, so we are very proud to partner with the world's leading provider of Internet TV,” Anders B. Christjansen, CEO of Waoo!, said in a translated version of the announcement. 

Waoo!, which offers a mix of TV, broadband and phone services, currently has more than 270,000 customers. Netflix launched in Sweden, Denmark, Norway and Finland about a year ago. Last month, Netflix said ISPs in Denmark delivered the highest-quality Netflix streams, clocking in an average of 2.64 Mbps.

nScreenMedia and Danish publication Jyllands-Posten and revealed details about the hook-up earlier this week.

According to nScreenMedia, Waoo! customers will be able to connect to Netflix directly through the operator, noting that the integration involved set-top maker AirTies and middleware vendor Nordija. But in somewhat kluge twist, when a Waoo! customer wants to view Netflix via the set-top box, the box itself must be rebooted in order to load the Netflix client. “This unusual and cumbersome arrangement is a demand of Netflix to accommodate the company’s strict content protection requirements,” nScreenMedia chief analyst and founder Colin Dixon noted, citing sources familiar with the project.

Waoo! is the latest international pay-TV and broadband provider to complete an integration with Netflix. Virgin Media in the U.K. and Com Hem and Sweden also have deals in place to offer Netflix on leased boxes that are powered by TiVo’s software and user interface. Virgin Media is testing a TiVo/Netflix combo ahead of an expected commercial launch later this year. Com Hem plans to offer direct access to Netflix by this December.

In the U.S., Google Fiber has integrated a Netflix player with the TV Box it is deploying in Kansas City.

Netflix is also in discussions with other U.S. operators, including Comcast and Suddenlink Communications, about offering its streaming service on leased devices. In Comcast’s case, talks have centered on porting the Netflix app to Internet protocol-capable HD-DVRs and gateways that run on the operator’s X1 platform. People familiar with the discussions say Netflix and U.S. operators have been talking about this, off and on, for more than two years. While the latest round of negotiations were characterized as being in the “very early stages,” they have apparently heated up again as Netflix carves out revised content deals that will allow it to stream video on cable-supplied boxes.

According to sources, a major sticking point in those negotiations is Netflix’s insistence that operators join Open Connect, a private content delivery network that relies on Netflix-supplied edge caches.

Comcast Cable CEO Neil Smit tossed some cold water on those talks during the company’s third quarter earnings call on Wednesday. “It’s not really a high priority for us,” Smit said of the talks with Netflix. “We have nothing to report on the Netflix front.”

Comcast has already launched Streampix, a cross-platform, premium VOD service that is considered a Netflix competitor.