@ Cable Show: Netflix And Hulu On Cable Set Tops?

Cable operators already deliver Netflix (NSDQ: NFLX) and Hulu over broadband but could the services now perceived as competitors wind up as part of the cable package? Time Warner Cable (NYSE: TWC) Chief Programming Officer Melinda Witmer sees it as a natural fit for two services that she views more as programmers than distributors.

Asked by moderator Meg James about Netflix and Hulu, a joint venture of News Corp (NSDQ: NWS). NBC Universal (NSDQ: CMCSA) and Walt Disney Co. (NYSE: DIS), during a panel at The Cable Show, Witmer included a jolting thought in her reply: “When are they going to arrive on a set-top box?”

And, yes, as she elaborated in a brief interview after the session, she means a cable set-top box. “Consumers are getting it on every device that’s coming on an IP basis today but not the set top. They look like a programmer to me and it makes me sense that we’d be doing business with them in the home on our equipment, too.”

Is TWC in talks with Netflix or Hulu? “We’ve reached out and I think probably virtually every operator has had some discussions. It’s unclear what their rights are to be able to come to a set-top box, which is an interesting question. But we’re interested in offering our customers what they want and if 23 million people or 25 million subscribe to Netflix, there might be something we can do with them that makes sense. Hulu just offers slightly different windows, a different ad load and an opportunity to sell a consumer a robust VOD product at a price that can make sense for them.” (That would be Hulu Plus.)

Could it be a companion for one of the smaller programming packages operators are exploring? Witmer came at it a different way: “One of the things we’re good at is selling people subscriptions to stuff. We’re really good at that. Someone’s got a subscription to sell, we should look at it.”

Update: How realistic is this? One programming executive scoffed at the idea, suggesting that it was pure talk. Fair enough — TWC or other operators can look like they tried even if they can’t deliver. Another exec suggested Netflix might be amenable if it helps the company expand further while lowering acquisition costs — but the service’s availability over broadband gives it access to consumers without sharing revenue. That’s aside from any rights issues; while cable distributors are negotiating for rights across platforms, programmers are still slicing and dicing with windowing or platform as ways of selling the same content multiple times.

One possible benefit assuming anything could be worked out: Netflix, Hulu Plus or similar services would be part of the TV programming guide, showing up as options whenever a consumer scans or searches.

Read more in our Cable Show 2011 archive.