Netflix to Become Available via Swedish Cable Operator

DOWN: Reed Hastings

Netflix posts a $5 million quarterly loss -- its first since 2005 -- even as the company's subscriber base grows to 26 million and CEO Hastings' pay jumps 68 percent to $9.3 million for 2011.

After its second integration deal with a European cable giant, the streaming video powerhouse is also looking for similar deals with U.S. cable operators.

Netflix's streaming video service will become available in December in cable systems owned by Com Hem, Sweden’s largest cable operator.

The deal follows an industry-first similar arrangement between Netflix and U.K. cable giant Virgin Media, owned by John Malone's Liberty Global.

When announced a few weeks ago, analysts said the Virgin Media deal could have ripple effects on other TV distributors and cord cutting. Some also took it as symbolic for pay TV companies' changing view of the streaming video giant.

Virgin Media said its subscribers would be able to access a Netflix app via TiVo set-top boxes that 1.7 million of its homes have.

Some analysts have suggested in the past that pay TV operators around the world could start integrating and streaming so-called "over-the-top" broadband services like Netflix instead of competing with them.

Sweden's Com Hem has more than 600,000 video subscribers and will also offer Netflix via its TiVo box.

"We are very pleased to offer Netflix in our TiVo service," Com Hem product development director Asanga Gunatillaka said. "The collaboration also demonstrates the great benefits of TiVo as a platform for home entertainment. With our TiVo service, we collect the best content on the market and make it both accessible and searchable at the same place."

Meanwhile, Netflix is also hoping for similar deals with U.S. cable operators as it looks to reach more subscribers by becoming available via cable systems, CFO David Wells told the Goldman Sachs Communacopia investor conference on Wednesday.

“We would love to reduce the friction to the end consumer and to be available via the existing device in the home," meaning set-top boxes, he told the event.

Netflix, which has also made its streaming service available via Blu-ray players, video gaming consoles and other devices, previously reported that it had 35.6 million subscribers as of midyear.

Wells reiterated analysts' comments that cable giants must decide if Netflix was a competitor or could provide a complementary service. Some argue that by integrating Netflix into cable boxes, companies could retain subscribers. Others argue that they may encourage cord cutting by allowing Netflix to showcase its service.

Twitter: @georgszalai