As Wal-Mart sneaks quietly out of the online movie business, Netflix, the video rental company that pioneered renting movies by mail, now wants to bypass the U.S. Postal Service and send those videos directly to your TV, in high-definition, using an Internet connection.
Netflix and TV set manufacturer LG Electronics, announced a joint project to develop a set-top box for consumers to stream movies and other programming from the Internet to HDTVs -- bypassing the need to use a personal computer. The companies say they hope to roll out the new technology in the second half of 2008.
Wal-Mart quietly closed its movie-download service Dec. 21. Hardly anyone noticed, illustrating the retail giant's failure to make much of a dent in the business. In 2005, Wal-Mart gave up on trying to run a DVD rental service similar to that offered by Netflix.
Netflix said the technology collaboration supports its core strategy of offering a multi-dimensional, or "hybrid," service that gives its more than 7 million members a variety of ways to receive movies and TV series for one monthly fee.
The company did not specify how much it would charge for the service.
Netflix subscribers currently have the ability to watch movies online, but must do so on their computer monitor.
With the availability of the networked LG product planned for later this year, Netflix said its subscribers will be able to watch movies streamed from the Netflix Web site on their large-screen home theater HDTVs as well.
Currently, mail subscribers may choose from among more than 90,000 titles delivered on DVD. The online service currently offers more than 6,000 titles, the company said.
"Internet to the TV is a huge opportunity," said Netflix Founder, Chairman and CEO Reed Hastings.
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Wal-Mart had launched its online movie business in February 2007, offering about 3,000 films and TV episodes. Its downloads were not usable on standard DVD players or on iPods, which analysts said hurt sales.
In its little-noticed Web site notice announcing the abandonment of the service, Wal-Mart said customers who had already bought movies would be able to continue watching them.
AOL also abandoned its online movie service recently. That leaves Apple's iTunes and Amazon.com to compete with the new Netflix offering.