Media blogs and forums have been buzzing over the past few months with speculation over a possible deal between Netflix and Microsoft to allow Netflix subscribers to view streaming films and television shows on their Xbox 360 game consoles. Rumors began circulating regarding a potential partnership between the two companies after Netflix CEO Reed Hastings joined the Microsoft board of directors in 2007.
Now the rumors have finally been validated: Reuters.com is reporting that a deal has been reached between Microsoft and the online film rental company. Beginning this autumn, Microsoft will upgrade the Xbox 360 software at no cost for Netflix subscribers who also have Xbox 360 Live Gold memberships. The upgrade will allow users to access over 10,000 film and television titles featured in the “Watch Instantly” service Netflix added to its web site last year.
The addition of a Netflix films and TV shows gives Microsoft Xbox 360 a competitive edge over its closest rival, the Sony PlayStation 3. While the PlayStation 3 utilizes blu-ray technology, and is capable of playing high-definition films, it does not have a streaming film capability to rival the Netflix “Watch Instantly” service.
With more than 8 million subscribers in the US, Netflix has become a major player in the video rental market in a relatively short amount of time. The company began by offering a simple but effective web-based film rental service that delivered DVDs to subscribers’ homes by mail. But Netflix is now moving toward offering more streaming films and TV programming, available instantly from its portal web site.
So far, neither Microsoft nor Netflix have revealed the monetary details of the joint venture, and it is unclear how many Xbox 360 Gold members (no relation to the Austin Powers films) are also Netflix subscribers. Still, news of the deal seemed pleasing to Netflix stock owners: shares in Netflix were up nearly 3 1/2 percent after the announcement of the deal with Microsoft.
This spring, Netflix announced partnerships with two independent electronics firms, Roku and LG Electronics, to produce set-top streaming video players to transmit the company’s web-based film catalog to user’s home television sets. The deal with Microsoft to stream Netflix films via the Xbox 360 gives the company yet another outlet for their growing catalog of streaming movies and television programs.
The deal also benefits Microsoft by adding even more functionality to their already popular Xbox 360; and it gives users an extra incentive to sign up for the Xbox Live Gold membership.
