Netflix and Cablevision announced a deal at CES this week that could have far-reaching repercussions for online video giants. Basically, Cablevision has signed on with Netflix’s Open Connect program and that could mark a drastic change in the relationship between MSO’s and the streaming video giant.

Essentially, Cablevision cut a deal with Netflix which will allow their convergent customers to access Super HD and 3D TV from Netflix. Open Connect is essentially Netflix’s own privade CDN which means the content is most likely residing far closer to Cablevision customers, perhaps even on the Cablevision network itself, so that it can be streamed far faster. Less distance to travel for the content means better quality can be delivered because of less network interference, etc. The more devices content needs to pass through, the slower it will be delivered in the long run.

Cablevision is the first major American MSO to sign on, joining Virgin Media, British Telecom, Telmex and Telus in the network.

This also marks the first availability of 3D from Netflix:

Titles available in 3D viewing include action fantasy drama Immortals, Red Bull Media House’s snowboarding documentary The Art of Flight, and several titles from 3net Studios, the joint venture of Discovery Communications, Sony and Imax, including native 3D series African WildScary Tales and Live Fire. –Multichannel

The incredibly interesting thing, is that Netflix offers this Open Connect for Super HD and 3D for free and yet, only Cablevision has taken them up on the offer. Ken Florance VP of Content Delivery at Netflix is quoted as saying as much. However, the first domino must fall for the rest to follow and so, I applaud Cablevision for being the first to step up and acknowledge that this could be good for their business and their customers. Almost makes me wish I could dump Time Warner Cable and get Cablevision, which I can’t.

Oddly, the December ISP rankings at Netflix showed Cablevision in 5th place, I bet this will boost them up that chart come the end of January. They were listed as average stream speed of 2.09 and in order to get Super HD or 3D you need 5Mbps they say. Even Google Fiber was only achieving 2.57Mbps. Perhaps that 5Mbps just just connection and average speed doesn’t need to be that high.

Could this be the future of major streaming video services? The marriage of MSO and streaming video service for better quality and faster speeds could be the cable companies out in their bandwidth war against online video services. I will be interested to see how this pans out for Cablevision and Netflix. I also expect that at least one other forward-thinking cable company will hop on board in the next couple months.