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Netflix Closer to Partnership with Microsoft

Thinks industry analyst

By Andrei Dumitrescu, Games Editor

3rd of June 2008, 20:11 GMT

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Microsoft and Netflix are moving closer to a partnership regarding the streaming of digital content to the Xbox 360 gaming platform. So thinks Michael Patcher of Wedbush Morgan, one of the few financial analysts that have a keen eye for the moves happening in the videogame industry.

As proof, he cited several references to "internet-enabled video game consoles," made as Netflix briefed industry insiders on its moves this year. Back in March, a Netflix spokesman conducted a poll amongst its user base questioning whether they were interested in a partnership for delivering movies to gaming

consoles.

Netflix sees the multimedia enabled consoles, the Microsoft Xbox 360 and the Sony PlayStation 3, as interesting platforms for expansion. Even if it still delivers movies the old fashion way, via snail mail, Netflix really believes that the future of the movie rental industry is online, where it can deliver movies quickly, taking advantage of broadband penetration. Getting movies to gamers that use consoles is an interesting proposition because this demographic is usually interested in movies but, as a rule, does not go out to rent them.

Without targeting the consoles owners, Netflix could hit a ceiling in subscription numbers somewhere around the 4 or 5 million level, predicts Wedbush Morgan. The consoles have a respectable install base that could double or triple that number easily. The only issue is that Microsoft and Sony need to sign up to an agreement that would allow Netflix access to the consoles.

Wedbush Morgan thinks that Netflix is now putting a lot of money into the creation of capable online streaming services, so that the firm is seen as one of those companies that can offer content creators the much talked about "digital media convergence."

Michael Pachter stated that "The competitive advantage of such an alliance is clear: Netflix customers who are Xbox Live members will have the ability to stream online content through their Xbox 360s directly to their televisions. The ability to do so is available without the Xbox 360, but requires a measure of technological sophistication and a high tolerance for failure."

It's not certain that we'll soon be getting Netflix movies on our consoles, but it might just happen, so keep an eye out for more news. The consoles might really become multimedia content delivery centers, after all.

TAGS:

Microsoft | Netflix | Xbox 360 | PlayStation 3 | downloadable content

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