Netflix to Stream Movies on PlayStation 3

26 Oct, 2009 By: Erik Gruenwedel

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As expected, Netflix Oct. 26 said it will make available next month the ability to stream movies and TV shows from the Internet to digital television for subscribers who own a Sony PlayStation 3.

The announcement pairs two of the most widely known home entertainment brands in the United States. The PS3 system’s installed base has topped nearly 9 million units domestically, and Netflix last week reported 11.1 million subscribers as of Sept. 30.

Netflix’s Watch Instantly streaming service is a free value-add service to monthly subscribers.

Netflix co-founder and CEO Reed Hastings during a recent financial call hinted the Los Gatos, Calif.-based online DVD rental pioneer would follow-up its highly successful partnership last November with the Microsoft Xbox 360 with a second major CE player.

Indeed, more than 1 million Xbox 360 Live members accessed Netflix streams in the first three months of availability.

Industry speculation suggested Sony, whose PS3 has lagged Xbox 360 and the Nintendo Wii in hardware sales throughout the year, as a likely suitor. Michael Pachter, analyst with Wedbush Morgan Securities in Los Angeles, said a pairing with Nintendo would realize greater subscriber growth potential for Netflix since Sony is heavily committed to Blu-ray Disc, including featuring a Blu-ray drive.

That’s a reality that Jack Tretton, president and CEO of Sony Computer Entertainment America, appeared to assuage when he stressed that the PS3 was always “about more” than just gaming.

“Whether you want to watch content on Blu-ray Disc and DVD, download it from the PlayStation Network’s video delivery service or stream videos instantly from Netflix, the PS3 system is the only solution that offers it all,” Tretton said.

Netflix members can instantly watch unlimited movies and TV episodes streamed to their TVs and computers via Netflix ready devices, which also include the Roku media player, Sony, LG Electronics and Vizio high-definition televisions, select Samsung and LG Blu-ray Disc players and TiVo broadband digital video recorders.

Wedbush’s Pachter said Nintendo has a bigger installed base than the PS3, but few of them are connected to the Internet, as there is not a compelling reason to do so. With a steady flow of updates, PS3 owners who play games are prompted to update when they buy a new game.  

“That means that most PS3s are connected to the Internet, so a partnership with Netflix allows PS3 owners to access Netflix, driving subscriber growth,” Pachter said, adding that Netflix emerges the clear winner in the deal.

“PS3 doesn’t benefit that much because there are cheaper alternatives, like the Roku box,” he said. “[The deal] helps Sony to eliminate an advantage Microsoft has with its Xbox 360 exclusive, but not much more.”

 

 

 

 

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