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Netflix Lifts Streaming Restrictions

14 Jan, 2008 By: Erik Gruenwedel

Online rental pioneer Netflix Inc. Jan. 14 said it will begin offering its 7 million subscribers unlimited access to a streamed library of more than 6,000 movies and episodic television.

The Los Gatos, Calif.-based service previously limited PC-streamed content to one hour per dollar charged to a subscriber's monthly rental plan.

The change affects all plans, with the exception of the $4.99 entry-level program that limits DVD rentals and streaming to two discs and two hours per month, respectively.

Netflix claims to have a DVD catalog exceeding 90,000 titles.

The move comes as cable operators, studios and other rental services ramp up digital distribution efforts in 2008, including video-on-demand (VOD) and electronic sellthrough.

Blockbuster Inc. says it plans to digitally distribute rental content through recently acquired download service Movielink and alternatively, Flash Memory sticks.

Apple Inc. and 20th Century Fox Home Entertainment reportedly are readying a deal that would let consumers rent Fox movie downloads from the iTunes Store.

Netflix earlier this month said it would begin later this year offering movies and related content directly to televisions via a third-party set-top box manufactured by LG Electronics.

“Unlimited has always been a very powerful selling point with our subscribers and a large part of what set us apart in the marketplace,” said chief marketing officer Leslie Kilgore. “In talking with members about our streaming feature during the past year, it became clear that, as with DVDs, the idea of streaming … on a PC resonated quite strongly.”

Michael Pachter, media analyst with Wedbush Morgan Securities in Los Angeles, said Netflix's decision was "inconsequential" considering that he believes few subscribers are willing to pay for the streams.

"[The streams]should be widely available through video-on-demand (VOD) or through Apple iTunes," Pachter said.

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