Netflix Reportedly in Talks to Partner With Major Smart TV System

Netflix may soon be working more closely with the companies that help distribute its content. According to a report by The Streamable, Netflix has been negotiating new possible deals with Roku and Comcast. These partnerships deal mostly with Netflix’s upcoming ad-supported membership tier, but they could have further implications down the line.

Rumors have recently indicated that Netflix was looking to purchase Roku and merge with the hardware company, but market analysts cast doubt on those stories. However, on Tuesday The Information published a more plausible report. It indicates that Netflix has started talks with both Roku and Comcast “to discuss arrangements under which those companies would handle either the ad sales or the technical infrastructure of Netflix’s forthcoming ad-supported tier of service.”

A Netflix spokesperson responded to the report, saying: “We are still in the early days of deciding how to launch a lower-priced, ad-supported option, and no decisions have been made. So this is all just speculation at this point.” Netflix has long claimed that it would never use advertisements to increase its revenue, but after its first-quarter earnings report in 2022 it changed its tune.

Even if the company takes the commercial route, Netflix is reportedly at a disadvantage to its competitors. Streamers like Peacock and Hulu are already profiting from ad-supported streaming, but they are utilizing connections between advertisers and affiliated brands like NBC and ABC respectively. When Disney+ launches its ad-supported tier later this year it will have the same headstart, whereas Netflix will need to forge its own new connections.

Roku typically takes turns with Amazon Fire TV as the most popular streaming hardware on the market. The company was in the news for several months last year as it tried to negotiate a new deal with Google for its access to YouTube and YouTube TV. At the time, Roku published a blog post touting its impartial, “independent search results” which gave no preference to any one streaming service. It’s unclear if this would impact any negotiations with Netflix.

Right now, Netflix has three membership tiers, none of which have advertisements. That will change in the months to come as Netflix experiments with ways to add more users to an existing subscription or watch ads in exchange for a cheaper monthly bill. There’s no word yet on when that kind of service might start.