Source: Reuters reports that Netflix is asking customers if they would want to stream their movies off of the Xbox Live Marketplace.
What we heard: Rumors have been floating around for months that movies-through-the-mail rental service Netflix would be teaming up with Sony or Microsoft to distribute its catalog of films over the console makers' online services, but the latest twist pointing to the company's interest in the sector came from a Reuters report this week.
The news service reports that Netflix has sent out a survey asking customers if they are interested in streaming movies off of the Xbox 360. A representative with Netflix wouldn't tell Reuters if the survey indicated a deal with Microsoft had been struck, but did say the company wanted to get its films on customers' TVs "in as many ways as possible."
That quote, in combination with the previous rumors about the deal, certainly make it seem as if Netflix would be eager to have its wares offered through Xbox Live. Considering that Netflix founder, chairman, and CEO Reed Hasting also occupies a spot on Microsoft's board of directors, there's a very real opportunity for the two companies to leverage their core competencies in a veritable orgy of corporate synergy.
That said, Netflix already offers a catalog of streaming movies to PC-bound subscribers. The company has also enlisted the help of LG Electronics to create a set-top box that will stream films in high definition, a function that would essentially be duplicated by the rumored Xbox Live deal.
On top of that, Microsoft already streams HD films over Xbox Live, and the feature lets users start to watch rented flicks before they've finished downloading. Netflix is in many ways a competitor in the streaming rental market, given that it offers subscribers a selection of 7,000 films to stream to PCs. A partnership with Netflix could let Microsoft offer a much broader array of films than it does at the moment, but that approach might not mesh with the Xbox maker's managed-portfolio approach to Live Marketplace content.
There are also logistical issues. Would customers need to be Netflix subscribers to use the service? Would nonsubscribers be able to pay to rent single movies? What happens to the existing Live Marketplace movie service? Does Netflix have the rights to distribute its catalog of streaming films to consoles as well as PCs?
Finally, this is an emerging market. Netflix clearly wants to offer users downloadable films to watch on their TV sets, but it's unclear if the idea has passed the early-adopter phase and become a technology that customers are ready to embrace in large numbers. The Netflix survey could well be looking to simply establish how comfortable consumers currently are with the idea of HD-to-TV movie downloads, or if it's something they even think about.
The official story: "It is our policy to not comment on speculation."--A Microsoft representative.
Bogus or not bogus?: Netflix was already known to be looking at the notion, but the survey doesn't make it any more a done deal. Bogus for now.