The inclusion of a Netflix app on cable set-top boxes could unlock one of the few demographic segments that have so far been relatively immune to the Netflix streaming video phenomenon and help solve what some critics have said is a sluggish growth outlook for the SVOD pioneer, according to Morgan Stanley media analyst Ben Swinburne.
Netflix stock took a 15% nosedive in April after it said it expected to add about 2 million international subscribers in Q2, well below analysts’ estimates of a 3.45 million subscriber increase and about 500,000 U.S. net subscriber additions, below the 550,000 additions Wall Street anticipated. The stock has rebounded somewhat since that time – shares were trading at $100.59 per share in morning trading Monday – but are still down about 12% since the beginning of the year.
In his note, Swinburne said that integrating the Netflix app into cable set-tops – something that Suddenlink Communications and others have done via TiVo boxes – at larger operators like Charter and Comcast could help boost Netflix subscriber growth, especially with older customers.
“We think Charter and perhaps even Comcast could move to integrate Netflix into their video offerings,” Swinburne wrote, adding that many U.S. households that don’t subscribe to Netflix generally skew older and are much less aware of Netflix programming.