Netflix To Offer Unlimited Movie Streaming

Netflix isn’t taking Apple’s charge into movie rentals lying down. The AP reports Netflix is set to announce unlimited streaming of films and TV shows on Monday, a day before Steve Jobs rolls out iTunes’ movie rental service at Macworld.

Previously, Netflix had capped the amount of time of TV/films that users could stream based on their subscription plan. Under the $16.99 per month plan, for example, users could stream up to 17 hours of programming. Now just about all of Netflix’s 7 million subscribers will be able to stream as much as they want, an interesting test of the subscription model, especially compared to Apple, which is expected to offer 24 hour rentals of films for $3.99.

A Netflix spokesman conceded this will raise costs considerably; the financial impact of the switch will be addressed on the Jan. 23 Q4 earnings call. Presumably, the fees Netflix pays to Hollywood and for bandwidth go through the roof, but it could mean fewer DVDs sent in the mail, which would lower some physical costs and postage.

Unlimited streaming is the second recent initiative to defend its turf from Apple. Before CES, Netflix teamed up with LG to build a box to bridge the PC-TV divide, a clear challenge to Apple TV.

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