Awash in a Stream of Movies

CNBC.com Netflix

Any movie, any time. Is that too much to ask?

It’s technically possible. It’s what the people want. It will make the movie companies rich. And yet not a single legal source of movies — hotel, plane, pay-per-view, video store, Apple TV, Vudu box, Internet downloads, nothing — offers instant delivery of any movie you want.

Netflix comes close. It’s got the “any movie” part covered, since it stocks virtually every movie ever released on DVD — about 100,000 titles.

As for “any time,” well, Netflix is best known as a DVD-by-mail company. You can freely rent and return DVD movies all month long for a fixed monthly fee ($9 to check out one movie, $14 for two at a time); they come and go in bright red, postage-already-paid mailing envelopes. There are no late fees or penalties. But “any time” boils down to “in a day or two,” because you have to wait for the movie to come in the mail.

But Netflix has been clawing its way out of its dependence on the postal system with a feature called Watch Now — and it’s especially worth watching now.

Phase 1. Twelve months ago, Netflix revealed the original Watch Now. It let you, a regular Netflix subscriber, watch any of 1,000 streaming movies on your Windows PC, on demand, without having to download them first.

In the following months, the catalog grew to 12,000 movies; more are constantly added. Mac software came next. The monthly hours-of-watching limit was eliminated; now any Netflix member with a plan of $9 or more can watch unlimited streaming movies, for no extra charge.

No extra charge is a crazy, game-changing concept. It transforms movie consumption from à la carte into all you can eat. You can watch favorite scenes of individual movies, or try a movie for 15 minutes and then change your mind. In short, you can movie surf, without ever worrying about running up your bill.

Still, a desk chair in front of a PC is not what most people would call the ultimate home theater setup.

Phase 2. Eight months ago, Netflix and Roku introduced a tiny TV-connected box ($100) that does only one thing, but very well: it lets you watch Netflix streaming movies on your TV instead of your PC.

Since a remote control and a TV screen make a clumsy system for browsing and searching the catalog, you still pick the movies you want using your Mac or PC, at Netflix.com. Whatever assortment of titles you choose online appears instantly on your TV’s list of available movies.

The Roku box is great. But let’s face it: It’s another remote to learn, another gadget to connect and more wires around the TV.

Phase 3. About six months ago, things began to get really interesting.

The Roku box was basically just a plastic box o’ software — software that could be built into machines that are already connected to your TV.

One by one, the announcements came: Netflix instant movies became a TiVo feature. An Xbox 360 feature. A Blu-ray DVD player feature (LG and Samsung). Even a feature built right into the TV sets themselves (LG and Vizio, starting this spring).

There’s genius to this master plan; everybody, apparently, wins. Consumers get a better on-demand movie deal than they’ll find anywhere else: $9 a month, unlimited. Netflix attracts millions more subscribers. And the equipment manufacturers gain a marketable new feature without having to spend another nickel on hardware.

You shouldn’t be surprised, in other words, if this instant Netflix thing becomes a huge, megalithic hit, a dominant movie delivery system, a more-or-less standard feature of home theater setups.

To find out what that future will look like, I’ve made an enormous sacrifice in the name of science. I’ve spent several months watching movies, using three of the first Netflix-enhanced products: my own TiVo, an Xbox 360 and an LG Blu-ray player (the BD300). Here’s what I found.

TiVo: The Netflix feature quietly installed itself in the TiVo’s menus one night, without my awareness or involvement. On the TiVo menu, you choose Video on Demand; you’re shown a list of services like YouTube and Amazon Unbox. Choose Netflix, and bam: there’s your list of Watch Now movies, in a scrolling vertical list. Hit Play to play one. (This works on TiVo HD, HD XL and Series 3 models.)

Xbox 360: Assuming you’ve upgraded your Xbox with Microsoft’s most excellent November software update, Netflix is now part of your game console. Log in, choose the Video Marketplace page, click Netflix and there’s your Netflix movie list, gorgeously represented as colorful DVD cases, which flip past as you browse (something like Apple’s Cover Flow feature in iTunes).

CONTINUED : What you need to make it happen

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