August 26, 2010, 3:29 PM

Netflix takes movies mobile

It’s launched a free mobile app that lets subscribers stream video to their smartphones.

Katie Evans

Managing Editor, International Research

Lead Photo

Netflix has taken another step into video streaming. This time it’s taken it mobile. The movie and TV show rental retailer has launched a free app for Apple’s iPhone, iPad and iPod Touch devices that enables subscribers to instantly stream video to their handsets.

"Apple has changed the game for mobile devices," says Reed Hastings, Netflix co-founder and CEO. "We're excited that our members can now carry Netflix around in their pockets and instantly watch movies and TV shows streamed from Netflix right to their iPhone or iPod touch."

The Netflix App supports Apple devices running iOS version 3.13 or later and is available via both Wi-Fi and 3G networks, Netflix says. TV episodes and movies are organized into categories based on members' personal preferences, popular genres, new arrivals and members' individual instant queues. A Netflix instant queue is a subscriber’s list of movie choices that can be viewed over the Internet. Members can choose a movie or TV episode from any of the lists and tap their phone screen to watch instantly or to save the title for viewing later.

The app enables users to fast-forward or rewind the video stream and stop at any time. When users want to start watching again, the video stream starts up where it was stopped. Subscribers also can pick up a movie started on a mobile device on a different device capable of streaming from Netflix. All Netflix subscribers can use the service for free.

Netflix has consistently been expanding the number of devices its members can use to watch streaming video instantly. For instance, subscribers can stream movies and TV episodes through Microsoft's Xbox 360, Sony's PS3 and Nintendo's Wii consoles; Blu-ray disc players from Samsung, LG and Insignia; Internet TVs from LG, Sony and Vizio; the Roku digital video player and TiVo digital video recorders; and now, Apple's iPhone, iPad and iPod touch.

Beyond devices, Netflix also has been working to broaden its selection of titles available for streaming. Just this month, it signed a five-year agreement with Epix that makes the premium movie channel’s library of films available to Netflix subscribers to instantly stream.

Epix, a premium pay movie channel available in about 4 million homes, is a joint venture among Paramount Pictures, Metro-Goldwyn-Mayer and Lions Gate studios. Combined with agreements made with other companies, the new agreement provides Netflix subscribers streaming video access to about 46% of new Hollywood movies, Netflix says. Epix will make films available about three months after they debut on pay TV. The agreement begins Sept.1.

Netflix signed a similar distribution agreement with the Starz TV network in 2008. In July, it signed a deal worth more than $100 million a year with Relativity Media, which makes films available to stream at the same time they hit pay TV. Netflix launched the Watch Instantly service in 2007 with 2,000 mostly older titles.

More retailers are seeing dollars in streaming video. Beyond top rival Blockbuster offering the service, Sears.com and Kmart.com and Best Buy also recently announced  programs to sell on demand access to videos and shows. Sears.com and Kmart.com announced their offering in June and Best Buy announced its program a month earlier in May.

Many industry experts predict Netflix will begin charging more for its streaming service by early next year, perhaps by charging more to receive a higher-quality video stream or by limiting the new releases to subscribers willing to pay more.

Netflix, No. 14 in the Internet Retailer Top 500 Guide, has more than 15 million members and posted 2009 sales of $1.67 billion, up about 22% compared with $1.36 billion a year earlier.

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