The FINANCIAL — Sony said on October 26 it has signed a deal with Netflix. The deal will allow Netflix to deliver movies through Sony's PlayStation 3 video game console. PlayStation 3 subscribers will initially have to access the movie service by loading a special Blu-ray disc into the game console. The disc will be available free from Netflix.
The agreement between the Los Gatos, Calif., video delivery company and Japan's Sony erodes an advantage that Microsoft Corp.'s Xbox 360 had enjoyed for the past year over the PlayStation 3. The Xbox 360 was the first game console Netflix agreed to deliver videos to through its Internet movie service, according to The Wall Street Journal.
Sony makes its own Internet movie store available from the PS3, with new-release films and TV shows costing $3 to $4, The New York Times reported. The Netflix service is available only to people who pay a monthly subscription of $8.99 or more for its DVD-by-mail plan, and its catalog includes content that is usually more than a year old.
The PS3 implementation of Netflix is not the most elegant. PS3 owners will have to order a special, free disc from Netflix and pop it into their gaming console whenever they want to access the Netflix queue and watch a movie, the same source wrote. Sony and Netflix seem to suggest this is a short-term solution, until an upgrade next year in the PS3 software.
Sony's move is just the latest salvo in its battle with Microsoft and its Xbox 360 console as the two heavyweights vie to become the so-called "digital hub" of the living room, according to Reuters. Both companies are using their consoles to provide content beyond games. "While gaming is clearly our core DNA I think we felt very confident three years ago when we debuted PlayStation 3 that this was going to be a device that was going to mean much more than gaming," said Jack Tretton, chief executive of Sony Computer Entertainment America.
Although Netflix offers thousands of movies and TV episodes for instant streaming, it does not make its entire catalog available, the same source reported. Netflix will be up and running on the PS3 in November, Sony said.
Asked whether agreements like this one will help Netflix to expand the catalog of content available for instant streaming, Reed Hastings, Netflix’s chief executive said that is more a function of the company’s overall 11.1 millionsubscriber base, The New York Times informs. “Our ability to license more content is based on what checks we can write,” he said. “If getting on the PS3 helps our subscriber base grow, that helps us write bigger checks.”
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