Last week we stated the case for why we might see Netflix roll out its own dedicated set-top box in the not too distant future. However, during the company’s Q3 earnings call with investors, CEO Reed Hastings talked up more ambitious plans including the possibility of putting Netflix’s online video service onto next generation games consoles, XBox 360 and PS3, along with networked DVD players and other set-top boxes.
“Our goals in online video over the coming years are three-fold: one, to expand the content we offer online; two, to make it inexpensive and easy for consumers to view that content on the television; and three, to understand what the financial model for the hybrid service will be in the long-term.”
In terms of making it easier for consumers to view online video on a television, Reed says that Netflix are working with a “variety of partners” to explore options including Internet connected, high definition DVD players, Internet connected game consoles, and dedicated Internet set-top boxes.
“In the meantime, laptop computers are, for the younger generation, one of the primary ways video of all sorts is being enjoyed, and our online viewing is up dramatically quarter over quarter.”
Reed warned, however, that it might take years before Nextflix is able to offer the same number of film titles through its online video service, as it does on DVD.
“We are working steadily year after year to increase the amount of movies and TV shows we have available online. It took 10 years to get most content available on DVD and it may take that long again to get most content online.”
To that end, Netflix will continue to offer a “hybrid service” that combines traditional DVD rentals, along with expanding its online video operation. “… since a good deal of content will be available only on DVD for some years, a hybrid offering like ours is differentially compelling to consumers in comparison with any online only offering”, argued Reed.
Getting access to the XBox 360 or PS3’s millions of users would make a lot of sense for Netflix, while fulfilling the company’s aim to make it “inexpensive and easy” to get its online content onto a television. However, Microsoft and Sony won’t be so keen to help put a competitor’s online video service onto their platform; the XBox 360 already has its own online video rental service in the XBox Live Video Marketplace, and Sony has plans of its own to launch an online video network for the PS3.