Netflix Gains Access To 300M Global Pay-TV Homes Via 'Onboarding' Deals

Netflix is making self-interested allies of potential competitors… and it’s paying off, big-time.

By forging set-top-box integration partnerships and carriage deals with more 100 major pay-TV operators to date, the giant SVOD has established itself as an option in more than 300 million global pay-TV homes, according to a new report from data and analytics firm Ampere Analysis.

That translates to more than half of the world's pay-TV subscribers outside of China (where Netflix hasn’t been allowed to operate).

Not a bad prospect pool for Netflix, whose actual global subscriber base is currently at an already impressive 158 million.

The streamer has signed more than 15 deals with major international pay-TV operators this year alone, including one with France’s CanalPlus this fall.

In fact, Netflix has in recent times been so successful at overcoming “hostility” in France that all of country’s major pay-TV operators now carry the service, points out the report’s author, Ampere analyst Elinor Clark.

By the end of last year, some 86% of Netflix subscribers in North America, and three-quarters of its subscribers in Western Europe, could access Netflix through their cable operator’s set-top box.

“The increase in the number of pay-TV [carriage] partnerships with Netflix marks a distinct shift in the industry, as more and more of the streaming giant’s traditional ‘enemies’ [cozy] up through onboarding deals,” summed up Clark.

These “onboarding” deals could be critical in enabling Netflix to continue its rapid global growth, she believes.

And there are still large swaths of the world yet to conquer. Netflix has yet to clinch deals with many of the big pay-TV players in Central and South America, Central and Eastern Europe, and Asia-Pacific region, according to the report.

There are nearly 400 million pay-TV customers across those regions, where Netflix currently has 40 million subscribers.

As noted by The Hollywood Reporter, HBO also has long-running deals with pay-TV operators around the world, and as it prepares to launch HBO Max, parent WarnerMedia has indicated that it will continue those relationships. (In October, HBO renewed its programming output deal with Sky for Europe and extended their co-production partnership to HBO Max series.)

Pay-TV operators’ reasons for participating in such agreements is not a mystery. Clark points out that these relationships can be lucrative for the operators, providing an additional revenue stream at a time when many are seeing declines in average revenue per user, and in some markets, increases in cord-cutting.

All of this more or less jibes with the attitudes of large pay-TV operators around the world as expressed in a recent survey.

As I noted last month, three-quarters of pay-TV operator and content executives recently surveyed said that they believe that “super-aggregator” pay-TV platforms will emerge over the next five years, and attract a significant proportion of customers who pay for video content.

“Despite initial anxieties, many believe that new standalone direct-to-consumer services” — including Disney+, WarnerMedia’s HBO Max and NBCUniversal’s Peacock — “will be largely complementary,” and “will not pose a significant threat to the pay-TV industry,” the survey found. “Instead, executives see opportunities for pay-TV providers to adopt a super-aggregation model for these services.”

If only the world’s governments could be as cooperative.

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