Media Money with Julia Boorstin

Netflix on Nintendo; New Streaming to the Wii

Netflix has been on a run, announcing deal after deal to make digital access to its movie library available to subscribers from their televisions.

Now Netflix has struck a deal putting digital access to its movie library on the most popular video game console, the Nintendo Wii. Now Netflix subscribers can access their streaming Netflix account from any of the video game consoles—Netflix started streaming to Sony's Playstation 3 last year and it's been streaming through Microsoft's XBox since 2008.

This move gives Netflix, which has more than 11 million subscribers, access to a huge number of potential new subscribers — Nintendo consoles are in 26 million homes in the US. Having that placement on the Wii console is a great way to reach new subscribers, to get more people to shell out the $9 a month it costs to access the online service.

Last week I interviewed CEO Reed Hastings about his strategy for the company that started off renting DVDs-by-mail. His response: it's all about digital. Last week the company announced a handful of deals to put access to Netflix streaming on new TVs and Blu-Ray players.

What does it mean for console makers?

Nintendo and other game makers are pushing to make those consoles the entertainment hub of your living room, going far beyond video games. If Nintendo, XBox and PS3, can put itself at the center of your digital access to content, the console maker gets a piece of a new revenue stream -- selling movies through their devices means a bit of money as well as a more engaged consumer.

Wii At The Movies with Netflix

Competition amongst the console-makers is heating up as Sony and Microsoft prep new motion-control sensor technology in the wings. Nintendo's motion-sensor joysticks revolutionized the game business once, but now Sony and Microsoft are preparing to leapfrog beyond that, with motion sensors that eliminate the need for any joystick. By offering the same access to Netflix that its rivals have, Nintendo is doing what it can to keep gamers from upgrading, and switching to a different console that has that motion sensor technology.

Now the question is — can Netflix expand its digital streaming catalog? Now the movies that Netflix offers online tend to be older than the ones it will ship in the mail. Netflix says that the bigger the audience for its digital streaming business, the more it'll be able to expand the catalog.

We'll see how much placement on all these devices acts like free advertising.

Questions?  Comments?