Pachter: Xbox Live getting Netflix'd

Noted Wedbush Morgan analyst cites executives' repeated references to "Internet enabled video game consoles" as evidence a streaming-movie deal is in the offing.

by

In March, Reuters reported that Netflix was surveying its customers about whether they were interested in streaming movies via the Xbox 360. The report came just weeks before the mail-based video-rental service unveiled its first set-top device to stream videos directly to subscribers' televisions. But while the device, manufactured by Bay Area consumer electronics manufacturer Roku, is garnering solid reviews, it still requires consumers to plunk down $99 in addition to their Netflix subscription service to watch videos.

Little wonder, then, that during a recent summit in San Francisco, Netflix executives were hyping up other delivery channels besides the Roku box to analysts; analysts like Wedbush Morgan Securities' Michael Pachter, who left the event convinced that Netflix is on the verge of announcing a deal with a major console-maker.

"As we have speculated in the past, we believe that one of Netflix's partners is Microsoft," said Pachter in a note to investors. "We arrive at this conclusion based upon Netflix management repeatedly mentioning 'Internet-enabled video game consoles' [at the event]. While there are three such consoles, only one (Microsoft's Xbox 360) has a sufficiently large installed base to make sense from a streaming partnership with Netflix."

Pachter continued, "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."

When contacted by GameSpot, Microsoft reps repeated their favorite mantra, saying "We don't comment on rumors." A senior Netflix representative seconded the sentiment, saying only "We don't comment on speculation."

However, if a Microsoft-Netflix deal is announced in the weeks before the looming E3 Media & Business Summit, it will raise a host of questions. Would such a service require 360s equipped with hard drives? Would such a service replace Xbox Live's current film-rental service or complement it?

Discussion

185 comments
10below
10below

How about an update to this article? Netflix and Xbox 360 announced their partnership at E3 2008, and they intend to bring this capability online in Fall 2008. That's just around the corner.' This from Netflix's site: Netflix and Microsoft have announced a new partnership that allows Xbox 360 game systems to stream movies from Netflix. Starting in late fall, Netflix members will be able to instantly stream movies and TV episodes from Netflix to their televisions via a broadband connected Xbox 360. Active Netflix and Xbox Live Gold memberships are required. And the July 14 2008 Xbox press release: http://www.xbox.com/en-US/community/events/e32008/articles/0714-netflixteamup.htm

Droymac
Droymac

It sounds like a lot of you still don't understand what this means. Let me break it down for you -- All Netflix users already have the ability to stream movies at no extra charge on Netflix.com. This partnership with Microsoft will allow Netflix users to log into their account through XBL, again at no extra charge. I imagine it will be the same as doing it through their website on your computer. There is no actual download, it's all streaming from the Netflix database. Now, to those of you with your Blockbuster Total Access bullsh*t (I was a Blockbuster customer until after the fifth time they screwed up my dvd order in a row). What Blockbuster and Netflix have in common is the mail delivery system in which you recieve your movies in the mail at home. However, with Netflix once you have mailed your movie back, there are 10,000 titles available to stream online for FREE while you wait for your next dvd in the mail. Blockbuster requires you to visit one of their stores, and PAY an additional exchange fee each time. So...who has the better deal?

combatsoldier
combatsoldier

I wonder how much something like this is going to cost us. We already have to pay to even use there online service. They should give us a credit of like one free movie a week to atleast show us that they care about the clientel.

justagrouch
justagrouch

Netflix already has streaming videos available to their customers. The amount you can watch at no extra price is capped and I don't recall how much. This would be good news for me though because due to me owning an iMac, I was unable to take advantage of this service because it only worked with Windows due to who knows why besides Apple probably making it hard for them. I can only cross my fingers.

datniccah187
datniccah187

It sounds like it could work, they probally have quite a few downloading issues in the beginning though. I tried to download a movie once and it almost took an hour. I don't know if that was just how long they take, or if my internet connection was bad at the time.

okassar
okassar

That sounds better than the huge downloads that are the movies on Xbox Live now.Let's see a definite subscription price.But seriously,I own a 360 and Xbox Live and I use it mainly for gaming and that works great,you know,COD4,GTAIV,Halo 3,Mass Effect...all that good stuff.Netflix streaming would be a good option but Blockbuster Total Access is probably more affordable and they mail you the movies if you wanna talk about convenience.Whatev.I'm still waiting for a cheap Blu-ray peripheral,that would be frikkin' awesome,instant buy for a lot of people.

Big_Daddy_P72
Big_Daddy_P72

I have used XBL's video download and it is okay, however I am not only a gamer but a big home theater enthusiast. For me I would rather keep my Blockbuster Online account where I rent BD for my PS3 and exchange them in store for new release BD or DVD. You just don't get the same house rockin' experience from a download or video quality from the non HD downloads on XBL, which overwhelm the HD downloads.

darkride66
darkride66

I've been currently underwhelmed with the quality of XBL's video download service, not to mention the selection available since they launched a few months ago in Canada. It only took 2 downloads to realize this was no better than the video on demand service my cable company provided, with better selection, no waiting, cheaper prices and the same video and audio quality. Netflix may offer a better selection, but I'm still going to have to wait for the file to download enough to watch. And given that people are having to struggle with less download bandwidth and limits from their ISP's, I don't think DVD or Blu-Ray have anything to worry about from download services anytime soon. VOD services have been available for years and is implemented better.

Pedro7_2000
Pedro7_2000

I'm already in love my Xbox and Netflix service, so if this pans out to be true...I'm going to divorce my wife and ask XBL-Netflix to marry me.

coolman437
coolman437

who cares about watching this on your xbox really, its nothing new you still have to fork out 99 bucks for the box to watch normally on your tv/computer but now its on the xbox nothing fantastic kinda corny i think but mircosoft needs to do something after the Hd-DVD attachement Sh*t the bed they should just get blu-ray and end it

Hvac0120
Hvac0120

[quote]only one (Microsoft's Xbox 360) has a sufficiently large installed base to make sense from a streaming partnership with Netflix.[/quote] True. However, only one of those three have garnered over 120 million customers during a console generation. Also, Sony is vamping up the PSN. As each month passes, Sony resolves more and more issues with the service. They have been in talks with people for distributing videos and they have not announced how they will do that. It seems to me that Sony has enough background to be in talks with Netflix also. Also Microsoft has Xbox Live Video Marketplace. So figuring out how Netflix AND XBLVM will live together is a huge challenge. I certainly can see Microsoft dropping off a lot of their services in order to integrate, but it just seems like more work than it's worth. I wouldn't mind either way it goes. Maybe both PS3 and Xbox360 will get a deal with Netflix? Since nobody is commenting on the rumors, we can only predict what we think may happen. Pachter obviously hasn't had any special intel on the situation. He just seems to be biased towards Microsoft's online service. Unless he has more info that what the internet has posted, then it remains only his opinion.

ChickenHounk911
ChickenHounk911

You see? I knew this was coming, I just knew it based on a "rumor control" article about this earlier this year. I still went out and bought the box for $99. Oh well, I guess the bright side of all this is that now, I can watch some movies on my Xbox 360 and I can put the box on another TV and watch other movies. I also like the fact that if you are a netflix memeber, streaming doens't cost more than what I pay for my plan. Good stuff!

Raynever
Raynever

jbot666 "Why? I can stream Netflix movies for free off any browser" i thought it only worked with internet explorer?

shadow8585
shadow8585

Xbox live is the best, hands down

jknight5422
jknight5422

As always, it depends on the cost of the service. If it's the same as the DVD mail service and you don't make movie "backups", then I guess it would be ok.

JohnnyNeat
JohnnyNeat

If the movies are at 1080p or, if push comes to shove, at least a solid unfliltered 720p at a cost of free to gold members or at a steep discount than we are talking NO BRAINER here. Fingers are crossed!! P.S. My number one fear ahead of this costing more and not being in true HD is the download times and the hit LIVE would get from such a thing. We all know how CHEAP Microsoft is with LIVE and servors.

baller72
baller72

$99 huh... not surprised at all...

Tha_lazyboi
Tha_lazyboi

This is great! I think I better hold off buying that box. I hope this really does happen. Another reason why my 360 is used more.

wiiplay1
wiiplay1

Ash2X, you've never heard of Netflix? Oh my... Well I don't know anybody that uses Netflix at all.

Ash2X
Ash2X

Never heard of em before,but it sounds good :D

osxgp
osxgp

This is a great idea, however; will it help Japanese sales?

DiscGuru101
DiscGuru101

'While there are three such consoles, only one (Microsoft's Xbox 360) has a sufficiently large installed base to make sense from a streaming partnership with Netflix." -Oh snap! This is a fantastic idea.

hoolesy
hoolesy

Microsoft when are you going to appreciate that the majority of the poor 50ds in England are so far away from BT exchanges that download speed is AWFUL and as for streaming, well it buffers every 2 minutes on STANDARD definition. Please realise that DLC is not feasible for a lot of your customers and therefore Blu-ray add on would be the greatest thing ever. Make it cheap, suffer the loss and keep on with the fight.

gatsbythepig
gatsbythepig

Why do we keep getting reports from Pachter? He is usually wrong or is just pointing out the obvious, like in this case.

NeonNinja
NeonNinja

To whoever vbdevpro responded to: Pirating anything is wrong. People work on it and it doesn't deserve to be stolen. Whether it's movies, music or games or even more. It's as if you're spitting on all of their hard work.

vbdevpro
vbdevpro

"I just download movies for free but if the ability was there to stream all new movies directly to the 360 for less than the price of a cinema ticket, I would certainly avail of this service and so would most people I would think" People like you are the reason computer game developers are struggeling. It's why games are being developed for consoles first and computers second. Pirating movies IS THE SAME thing as games.

thelastguy
thelastguy

[This message was deleted at the request of the original poster]

HVPinc
HVPinc

I miss the days where buying a console was about buying a game playing machine. now its like buying a cheap computer...

Soupflakez
Soupflakez

TrueProphecy22: Who would be more poised to take on a Netflix deal through their internet service via consoles, Microsoft or Sony? Microsoft. Besides, Sony has its own movie studio and a ton of subsidiaries. They could easily come out with Sony-exclusive movie downloads and have a pretty large movie collection to choose from.

bizsumpark182
bizsumpark182

Beesters The Roku box cost $99. Its just a box dedicated to streaming Netflix movies to your tv. Anyways, I hope they do have a deal with Microsoft. I would certainly take advantage of it.

Beesters
Beesters

wait, 99 dollars a month???? or a one time fee?

TrueProphecy22
TrueProphecy22

I would actually guess Sony to be the one working on this deal. Didn't they say they would be providing online movie rentals in the future? Well, here it is.

dynomitemasta
dynomitemasta

Just one more choice the 360 will offer. Just knowing it's there is great. I really hope they keep the same format with offering movie previews, Netflix has a huge library. . . . . Does this mean that Blockbuster will hook up with Sony now?, they HAVE been pushing the PS3 and bluray in store as of late.....Hmm. . . .

IKKF
IKKF

I don't about that. It seems possible, but Microsoft would need to receive a huge offering of money, because they already have their rental service. I would personally like the idea of Hi-Def streaming more, but I don't have a subscription to Netflix to care too much. I am still liking my way of renting DVD's at the video store so this won't affect my life a whole lot.

lamprey263
lamprey263

awesome, now all Microsoft needs to do is hookup with GameTap

prioritymail
prioritymail

Sweet! I have netflix! Hopefully there is no extra charge for streaming on xbox live.... (I already pay for unlimited streaming on my computer)

jbot666
jbot666

Why? I can stream Netflix movies for free off any browser

grigjd3
grigjd3

It's a great idea. I'd love to not be tied to pay-per-view to get movies.

sinx1971
sinx1971

This is cool especially since I already have a Netflix account and rather stream movies from them through my Xbox 360! Though right now the only movies that Netflick stream through their site are mostly older movies hopefully this deal will include the newer releases as well.

Strikeout18
Strikeout18

I would say just have it replace the Xbox Live movie service.

Bgrngod
Bgrngod

If they roll the Netflix DL fees into the XBL yearly fee and no additional costs. I'd never get a movie by mail ever again. I'd be all over this. I already have Netflix and have loved it so far. It's hard to imagine how awesome it would be to be able to get the movies within an hour of requesting them. Just insane.

nobie05
nobie05

You must be crazy if you think im spending about $99 more dollars in addition to my subscription to netflix. I mean, I'm already paying for the xbox live membership. i'd be better off without it, because I feel like it'll make alot more problems for live members

Some_One_Plays
Some_One_Plays

To: Ziker

You most likely never heard of Rogers Digital Cable or Bell Express Vu, streaming has been done for free for the most part. The only thing is it isn't a true on demand service so things come and go like the theatres but some things come back again.

jmills1099
jmills1099

"This convenience would actually influence some people to move away from piracy and this would benefit the film industry. However, if new movies are not on offer, many people would already have seen them in the cinema or have illegally downloaded them for free." My only concern is that Netflix does not have nearly their full library available to stream on their current web based video player, so I would hope they'd add titles if this Xbox thing became a reality.

thenephariouson
thenephariouson

Brilliant, when i first heard the rumours about Neflix i was quite excited. Just hope we get the 'Full Library' in full HD. I also think that MS should subsidise our subscriptions with our XBL fee's. That would be a master stroke by MS.