Netflix didn’t bother waiting until next week’s Consumer Electronics Show to unveil its big living-room push for 2008: the movie rental service will team up with Korea’s LG Electronics to go head-to-head with Apple’s yet-unannounced movie rental service and its Apple TV set-top box. A new LG box due out later this year will play Netflix digital movies, streamed over the Internet, and possibly HD-DVD and Blu-Ray discs, the WSJ says ($).
This is an expected move, but smart, and could be a hit. Netflix’s current streaming service doesn’t work on Macs, and to watch its Web movies on a TV — the way most people still want to watch movies — you need a PC in the living room.
While the new LG device doesn’t sound like it could be used to permanently “buy” movies, store them on a hard drive or recordable disc, or load them onto a portable device like an iPod, that might not matter. Netflix already has 7 million customers that subscribe to its DVDs-by-mail service; by giving away some free movie streaming to its customers, it could build an immediate market for the device. And most consumers haven’t upgraded to either HD-DVD or Blu-Ray yet, so if Netflix and LG could cram all three technologies together in one affordable box, it could be an easy sell. (Unlike today’s $800 box that plays both discs and doesn’t stream Internet movies.)
[Netflix CEO Reed] Hastings said the LG partnership was the “first of many” Netflix expects to announce this year with makers of hardware devices, including video game consoles, to get its Internet service onto television sets. He said other companies have been so receptive to partnerships in this area that Netflix has shelved plans to make a set-top box under its own brand.
So, one of our first questions: Will that video game partner be Microsoft, Sony, or Nintendo? Our initial guess is Microsoft — whose current digital media sales efforts are lackluster, and which makes the DRM/video software that Netflix uses to stream its movies. Any ideas?
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