Netflix Inc.'s stock is rising after news that CEO Reed Hastings recently suggested that Netflix may team up with cable operators on its video subscription service, potentially expanding the online video company's customer base.
Speaking at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco last week, Hastings that it could make sense for Netflix to partner with cable operators and have them offer its services as part of a cable subscription package.
Potential partnerships with cable operators would be another way for the Los Gatos, Calif., company to broaden its business and tap into more customers. Netflix's video library has more than 20,000 titles, including some material that can't be seen anywhere else.
"To be able to add Netflix to the bill, that might be very powerful, especially as we do more and more original content. We are more and more a classic cable network ... and so I think that probably is a logical path," Hastings said.
Hastings went on to say that such partnerships are not likely in the short term, but said that "it's the natural direction in the long term." He said that cable partners could use Netflix as a competitor for Time Warner Inc.'s HBO.
HBO offers an Internet-streaming version of its service, but it's only available to consumers who pay for the cable-TV channel. Netflix currently sells an $8 monthly service that beams video to TVs and other devices with high-speed Internet connections.
Netflix has about 22 million Internet streaming subscribers in the U.S. The company also offers a DVD-by-mail rental service that has been losing customers as Netflix focuses on the streaming service.
Shares of Netflix climbed $5.21, or 4.9 percent, to $112.34 in premarket trading Wednesday.