LG, Netflix Team Up on Streaming Movies to the Home

Consumer electronics giant LG Electronics is throwing its hat into the video-on-demand streaming business, collaborating with Netflix to develop a set-top box that would allow consumers to stream digital content from the Internet to the home TV set.

The technology is expected to be integrated into an LG Electronics networked digital media player, scheduled to be introduced on the market in the second half of 2008. The service, which will make more than 6,000 movies and TV shows available to consumers via the Netflix Web site—but without having to use a PC—will be available for a set price, which has not been announced. In 2007, Netflix, which makes the bulk of its revenues from distributing movies and TV programs via snailmail, launched a service allowing subscribers to instantly watch movies and TV series on their computers for as much as $17 per month.

Although the announcement of the box did not specify that the content would be hi-def, it did note that HD content would be part of the mix in the future. Most past experiments with such video on demand downloading services have failed, in part due to spotty selection and consumer apathy. Movie Gallery, which purchased the Moviebeam digital content streaming service from Disney last year, shut it down in December). A similar service offered by Wal-Mart was also discontinued in December.

The success of Netflix’s service could hinge on movie selection, which could be limited by downloading restrictions imposed by content owners; and/or LG’s ability to integrate the technology into media players that offer additional features that would make the devices more attractive to consumers.