Comcast CEO Sees Integration With Netflix

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Netflix's familiar interface may soon be coming to Comcast's set-top boxes. Image source: Netflix.

Comcast (NASDAQ: CMCSA) and Netflix (NASDAQ: NFLX) meet the definition of frenemies.

Both companies compete with each other and work together. It's a relationship where each side likely hopes the other one goes out of business while also having to sometimes root for its success.

The cable and internet giant fears the threat cheaper streaming services represent to traditional cable while it also licenses Netflix content. In addition, while the streaming leader would likely want to see traditional pay-television fall apart, Netflix may soon reach new customers by being integrated into some Comcast set-top boxes.

Comcast CEO Brian Roberts, speaking at Goldman Sachs' Communacopia Conference in New York this week, talked about how his company may integrate its streaming rival.

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What is Comcast working on?

During the event, which Comcast shared on its website (registration required), Roberts showed off what Netflix looks like when it's integrated into his company's Xfinity platform. Much like what Frontier Communications (NASDAQ: FTR) already does, the integration makes it so users of the streaming service do not need a Smart TV or an additional streaming device. Instead, Netflix is accessed directly through the cable box.

In the Frontier version, Netlfix is simply a channel that brings consumers to a log-in screen. Roberts did not explain exactly how it would be accessed through Comcast's boxes, but he did say it would include easy logins for Netflix subscribers and the ability to sign up for the streaming service if they are not already members.

"Netflix, as we know, is wildly successful, and it has pretty much got content that you don't get with your [Comcast] X1 existing subscription," he said, according to The Hollywood Reporter. "Our organization has made a conscious decision that we are going to aggregate other people's content, some of which we sell directly, some of which we don't."

And while Netflix integration has reached the beta testing stage, Roberts did acknowledge that his company was talking with other streaming companies as well.

How did this come together?

While it's in the very early stages, the Netflix/Comcast partnership, at least as far as cable box integration goes, began when the two companies leaders got to know each other.

"Reed Hastings and myself spent some time together," said Roberts."I give him a lot of credit for helping make it happen. We always had tremendous respect, I think, for both organizations. We occasionally didn't see eye-to-eye on everything."

Why is this good for both companies?

Customers want convenience. Some cable customers may be torn between streaming and cable partly because of the inconvenience of switching between the two. In many cases, that involves using a separate remote to switch inputs on your television.

Integrating Netflix (and other streaming services) directly into your cable box puts more content into people's hands without much effort. If Comcast plays it right, it could not only keep its subscribers, but get a cut of revenue from new signups to Netflix and other streaming services.

If you view Netflix as just another premium content provider, then it's not a threat to Comcast. It's a potential asset. The streaming leader would become another service people access through a set-top box -- the same box that brings them hundreds of channels and on-demand programming.

This is a case where frenemies playing nice should benefit both.

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Daniel Kline has no position in any stocks mentioned. He hates having to switch inputs. The Motley Fool owns shares of and recommends Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.