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Netflix's New Apple Apps and Higher AT&T Charges

Netflix CEO Reed Hastings took the stage at the Apple developers conference to announce that he and Steve Jobs are bringing Netflix to the iPhone. Netflix stock moved higher on this news, which confirms how far the movie distribution company has moved past its DVD-by-mail roots. Netflix's iPhone app will be free, though to access streaming video you have to be a Netflix subscriber.

More digital, mobile access to Netflix movies is sure to draw more subscribers. But streaming movies — which takes up a fair amount of bandwidth — doesn't come without cost. Just last week AT&T announced that it's dumping its unlimited data plans for usage-based pricing. AT&T says if you spend 35 minutes a day streaming video to your device every day, in addition to web surfing and e-mails, you will top the 2 gigabytes of the pricier, $25-per-month service plan. That means that heavy Netflix users will be paying some hefty AT&T bills.

The specter of sky-high bills may discourage users from going overboard with the streaming video. But if Netflix's service becomes incredibly popular, that would put additional strain on AT&T's service, forcing the carrier to invest in some new infrastructure.

Questions? Comments? MediaMoney@cnbc.com

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.