Netflix (NFLX) just scored a huge distribution channel for its Internet movie streaming service: Via Microsoft’s (MSFT) Xbox 360, it gets potential access to 10 million U.S. living rooms, many of which already have their Xbox hooked up to the Internet. That’s a big audience compared to the number of Apple TV gadgets that Apple (AAPL) has likely sold: 2.6 million through June, Piper Jaffray analyst Gene Munster estimates.
The next step for Netflix boss Reed Hastings: Signing more distribution deals with studios to bulk up — and vastly improve — the movie library that Netflix is allowed to stream.
Why? Because Netflix’s current streaming library is “Like the kind of DVDs you would see in the bargain bin at the 99 cent store,” commenter “Joe” once said on our site. Specifically, of the top 100 Netflix DVD rentals, only two are available for Internet streaming: no. 75 “Eternal Sunshine of the Spotless Mind,” and no. 79 “March of the Penguins.” After that, at least as far as mainstream content is concerned, it’s mostly downhill. (Some good indie stuff, we’ve noticed — and some popular TV shows. But that won’t be enough.)
No big deal: Netflix still has several years before Internet streaming is more important than its DVDs-by-mail business. And the company is already planning to shell out money to bulk up its streaming library: Higher spending on streaming content is one of the reasons its full-year 2008 profit guidance upset investors after the company’s last earnings report in April. We assume some of that content will be on board before fall, when the first Xbox users will be able to log on.
Can’t wait? Below, “Eternal Sunshine” in its entirety, courtesy Hulu.
Photo: Curnen on Flickr