Netflix Launches $100 Set-Top Box Offering Unlimited Streaming Movies

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Netflix has always been an innovator when it comes to movie rentals, but this one takes the cake: Free movies when you buy a $100 set-top box. With the download revolution just on the horizon, Netflix's move should really, really scare Apple and Blockbuster.

Digital Journal -- Today, Netflix announced a new partnership with California start-up Roku Inc., makers of digital media streaming technology, that will offer Netflix subscribers access to streaming movies via a set-top box.

The new Netflix Player by Roku will cost you $100, but once you've got it at home it will stream Netflix's library of more than 10,000 movies and TV episodes directly to your TV. If you're a Netflix subscriber, you can watch as many movies as you want.

"The key breakthroughs of The Netflix Player by Roku are simplicity and cost," said Reed Hastings, chairman and CEO of Netflix. "First, it allows consumers to use the full power of the Netflix Web site to choose movies for their instant Queue, and then automatically displays only those choices on the TV screen. That's a major improvement versus the clutter of trying to choose from 10,000 films on the TV. Second, there are no extra charges and no viewing restrictions. For a one-time purchase of $99, Netflix members can watch as much as they want and as often as they want without paying more or impacting the number of DVDs they receive."

Blockbuster, Apple and everyone else in the movie rental and digital download businesses better be afraid, because this move is nothing short of enormous. No pricing wars. No silly one-week promotions to rent one get one free. Nope. Netflix just jumped to stage 10 of the Internet download wars by making everything free. Well sort of -- any Netflix account over $9 per month will get you access to unlimited downloads.

By providing a set-top box, they make it simple enough for any mom and pop to actually go for it; plug it in to your TV and the device handles the content streaming for you. No fussing with a computer.

The company has been looking for a way to compete in the growing movie-rental business, as many people are now downloading movies through peer-to-peer networks, and Blockbuster has been after Netflix's physical DVD customer base. Cable providers are also moving toward on-demand content but right now the pay-per-view model can still get expensive. Netflix now has more than eight million subscribers, a 21 per cent increase over a year ago.

While Netflix's streaming movie library is notably smaller than its mailing DVD business (10,000 compared to 100,000 DVDs, respectively), the business model will likely be attractive to anyone trying to decide where to rent movies from in the future.

If Netflix can build its movie library quickly, the entire movie industry is on the cusp of big change.