Netflix Seeking Game Console Partner

John Martellaro - The Mac Observer

Netflix, searching for a way to move to Internet delivery of video, may be looking to partner with a game console manufacturer, according to Forbes on Tuesday. One analyst believes that's Microsoft and Xbox.

Currently, Netflix has a service called "Watch Instantly" which allows customers to stream movies, from a library of about 9,000 titles. to their PCs on demand. Macintosh support has been noticeably lacking.

Propelled by investor concern about the long-term viability of the mail delivery service, Netflix is reported to be investigating a better delivery mechanism. In February, Netflix asked its customers if they would be interested in watching movies on their Xbox 360.

Several factors are at play here. It's well know that customers are reluctant to add a box next to their TV for every service out there, the so-called "box fatigue." In addition, the penetration of the Media PC into the living room has been very limited. As a result, companies that deliver movie content are looking for a way to piggy back on devices that consumers have already embraced, like the Xbox 360. Or perhaps the Apple TV.

"[I] am confident this deal is happening," said Wedbush Morgan analyst Michael Pachter. Mr. Pachter follows the video game space and suspects that Microsoft is Netflix's mystery partner. Or one of them. "It would drive 360 sales and would make Xbox Live more robust for existing users," he noted.

Such a move my Netflix would still leave Apple customers out in the cold, and they haven't been too happy about being forsaken to date. It would be reasonable for Netflix to seek to solve that problem by embracing not only the Xbox but also the Apple TV.

Netflix said it will disclose its partners in the fourth quarter of 2008.

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