expected to announce iTunes movie rentals at the Macworld conference this week, Netflix eased the restrictions on its movie streaming service. Starting today, all subscribers save those on the cheapest Netflix plan will have access to unlimited online video streaming from among the company's 6,000+ movie online library. This is seen as a preemptive strike against Apple, who may also tie their 24-hour iTunes movie rental service into their AppleTV set-top box product.With Apple
Netflix has plans of its own for a set-top box via a recent partnership with LG, as will as ambitions of putting the service onto popular video game consoles like the PS3 and XBox 360. For now, however, Netflix's streaming video option is only available on Windows-based PCs -- hardly conducive to a great viewing experience for most customers.
Apple's forthcoming service, on the other hand, is expected to be compatible with both the iPod and iPhone as well as possibly the AppleTV, which means more viewing options for consumers. By removing time constraints on viewing, something that users of Apple's 24-hour rental service will still need to contend with, Netflix hopes that consumers will overlook the relatively restricted viewing options.
Even though unlimited streaming may help Netflix compete with Apple's iTunes juggernaut, it could also hurt the company financially, says AP writer Michael Liedtke. "Letting subscribers stream as much as they want could erode Netflix's profits because the Los Gatos-based company isn't raising its monthly rates even though its expenses may rise if increased usage drives up the licensing fees owed to studios," he writes.
If Netflix is successful with its unlimited streaming service, could it also revive the rumors of a potential Amazon buyout? Amazon already sells movie rentals via its Unbox download service, and recently went head-to-head with Apple on MP3 music downloads. With Apple encroaching on its turf, combining forces with Netflix may seem like an attractive option (though a potential Internet tax issue could still stymie that idea).