Netflix, Comcast reach deal to ensure TV shows and movies streamed smoothly

Netflix's 1st deal with Internet service provider

NEW YORK (AP) -- Netflix has reached a deal with Comcast 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 one third of all traffic at peak times 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 agreements 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 multi-year deal, the statement said.

Comcast was ranked as the 14th fastest Internet service provider in January, according to a table on Netflix's website. By connecting directly to Comcast's network, Netflix should be able to boost the quality and speed of its video streaming as it adds more customers and prepares to start streaming its content in the ultra high definition format this spring.

Other large Internet companies such as Google already pay broadband providers a fee to enable more direct connections.

Comcast is the nation's number-one pay TV and Internet provider under its XFINITY brand. The company said earlier this month that it had agreed to acquire Time Warner Cable for $42.5 billion in stock.

--

AP Business Writer Michael Liedtke contributed to this report.

Print this article Back to Top

Comments

or Subscribe now so you can share your opinion! It’s only a penny for a month trial.

Latest Forecast
More Technology News
Why Microsoft is eliminating thousands of jobs
Why Microsoft is eliminating thousands of jobs

Ahead of its second-quarter earnings call on Tuesday, Microsoft is in the headlines for something other than its financial comings and goings. 

Why is Montel Williams following me on Twitter?
Why is Montel Williams following me on Twitter?

According to some, Montel Williams, former talk show host and outspoken celebrity, has a curiously active Twitter account. 

Tech Q&A: Treat your iPhone like a camera
Tech Q&A: Treat your iPhone like a camera

Find out the best ways to move photos from a phone to a personal computer. 

What happens to your FB account when you die?
What happens to your FB account when you die?

When you die, should your loved ones have access to your Facebook, Gmail and other online accounts?

Got a rash? iPad, other devices may be cause
Got a rash? iPad, other devices may be cause

Unexplained rash? Check your iPad. It turns out the popular tablet computer may contain nickel, one of the most common allergy-inducing metals.

10 tweets that may make LeBron's return awkward
10 tweets that may make LeBron's return awkward

A look back at angry tweets from Cleveland Cavaliers fans in 2010 may make Lebron James' return to the city a little awkward.

LeBron heads home: a digital review
LeBron heads home: a digital review

Each week, we round up the digital news that had everyone talking. Read on to see what you missed! 

Social media response to Lebron coming home
Social media response to Lebron coming home

Lebron James announces his return to Cleveland and his home in Northeast Ohio.

WATCH: Local MDs test new device for sleep apnea
WATCH: Local MDs test new device for sleep apnea

Millions of Americans stop breathing at night. The Christ Hospital is running clinical trials to help sleep apnea patients sleep easier.

ChoreMonster wins Disney company support
ChoreMonster wins Disney company support

Locally developed child’s chore smartphone app, ChoreMonster, received a major boost and recognition on Monday.