Netflix To Offer Streaming-Only Movie Service

The subscription movie-rental service is recognizing the growing popularity of on-demand video over the Web.

Netflix says it will eventually offer the option of online-only movie rentals, a reflection of the increasing number of people watching films streamed over the Web.

At the Jefferies fifth annual Internet and Media Conference, Netflix CFO Barry McCarthy discussed the company's plans for a standalone streaming service, saying Wednesday, "We're likely to do that in the foreseeable future," Reuters news agency reported.

Netflix started offering movies on-demand to subscribers of its by-mail rental service more than a year ago. Subscribers could pay an additional $9 a month to watch an unlimited number of movies over the Web on their PCs or, for no additional charge, choose to view an hour a month of streaming for every dollar spent on their subscriptions.

Since launching the service, Netflix also has made it available on Microsoft's Xbox video game console, set-top boxes from TiVo and Rook, and devices made by LG Electronics and Samsung. Netflix offers its 10 million subscribers more than 12,000 movies and TV episodes online out of its library of 100,000 titles.

Growth in its video-streaming service was a big contributor to Netflix's stronger-than-expected quarterly results, released last month. Reflecting the growing popularity is the success Netflix has had on the Xbox. Microsoft this month said 1 million subscribers of the Xbox Live online service have activated the Netflix application and have watched 1.5 billion minutes of entertainment since the service was launched last November.

McCarthy said the company will continue to focus on selling bundled online and by-mail offerings. However, he understands that some people will prefer the online-only option, particularly as more devices supporting the service hit the market.

Each year, InformationWeek honors the nation's 500 most innovative users of business technology. Companies with $250 million or more in revenue are invited to apply for the 2009 InformationWeek 500.

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