Netflix, LG to Partner on Set-Top Box

Video rental service Netflix and South Korean electronics giant LG have announced plans for a set-top box to stream high-def content to consumers' living rooms.

Video rental service Netflix and South Korean electronics giant LG have announced a plan to produce a set-top box that will stream high-definition video to consumers’ living rooms via the Internet. The companies expect to begin offering the player in the second half of 2008, enabling users to stream Netflix’s online rental catalog, currently consisting of more than 6,000 movies and television episodes.

Netflix launched a PC-based online video download service a year ago. The new set-top box would offer access to the same content, but would not require a PC. The company says the set-top box is a move in the company’s plans to develop a "hybrid" service that enables users to get video content in different ways. The bulk of Netflix’s business currently comes from its rent-by-mail DVD service.

"Internet to the TV is a huge opportunity," said Netflix founder, chair, and CEO Reed Hastings. "Netflix explored also offering its own Netflix-branded set-top boxes but we concluded that familiar consumer electronics devices from industry leaders like LG Electronics are a better consumer solution for getting the Internet to the TV."

The companies have not released any information on pricing; however, industry speculation has LG building Netflix streaming capability into its hybrid HD DVD/Blu-ray players, which currenly retail near $800.

To be sure, a number of companies—ranging from Apple to MovieLink to Vudu—have already tried offering different types set-top boxes to download and stream digital video content to the home. So far, none of taken off with consumers, who haven’t seen very keen on getting another set-top box to support a single service provider. But Netflix’s substantial subscriber base may give the company the momentum needed to make the concept work: time will tell.