Like a cartoon where the main character keeps finding another way to get into the house, Netflix is now popping up on Sony's PlayStation 3. The online rental service will make its library of thousands of movies and TV shows available to be streamed over the game console at no additional cost to Netflix members in the U.S.
The move adds yet another way Netflix can get to consumers, besides the popular mailed red envelopes bearing DVDs that propelled the company to its current membership of more than 11 million subscribers in the U.S. The PS3 offers an installed base of nearly nine million units in this country.
Netflix has also been busy making deals for inclusion through other consumer electronics. For instance, Netflix has another deal with Sony to include the service with certain Net-connected TV models.
While Netflix has been figuring out new avenues for delivery, Sony has been busy repositioning the PS3 as what it calls "the most complete home entertainment hub on the market today." In addition to high-definition games, users can watch movies on the built-in Blu-ray high-definition player, listen to music, surf the Net, flip through photos, and download a variety of content from the PlayStation Network.
To watch the Netflix fare, PS3 households will need to have a membership in the service, although there is no additional fee charged by Sony. A Blu-ray disc will be made available to all Netflix members, and, if the console is online via Ethernet or Wi-Fi, the PS3 owner can activate the Netflix user interface.
The no-cost approach contrasts with the $50 annual fee charged by Microsoft to get the Gold level of Xbox Live, which includes access to Netflix if you have a membership. Some industry observers have suggested that Netflix will also appear on Nintendo's Wii at some point in the next year, which would support other rumors of an upcoming high-definition Wii.
Free 'Is a Big Deal'
Jon Erensen, an analyst with industry research firm Gartner, said "the fact that Netflix is free on the PS3 is a big deal," although it remains to be seen whether the additional social functionality offered in the Xbox will be a sufficient competitive advantage.
Erensen pointed out that such deals as Netflix's are not drivers for people to buy the console, although they add value to the purchase once it's in the house.
Forrester's James McQuivey said Netflix on the Xbox has been a "tremendous success." Not only are people using it, "but it's changing the role they give the Xbox in their homes." Console owners are now more willing to use the Xbox video-on-demand experience, he said, so it "only makes sense for Sony to do the same."
McQuivey also said Netflix could end up being the star in this movie. "In the long run," he predicted, "it will turn out that Netflix was the little engine that could -- the small, unassuming service that brought millions of users into the world of streaming video and forced the convergence of an entire industry."