Netflix Streaming Coming To A New Device, I’m Betting It’s The Wii

On yesterday's earnings call, Netflix CEO Reed Hastings said that sometime this quarter, Netflix's streaming service will be coming to a new consumer electronics device. As a result of this forthcoming offering, Netflix said it was raising their guidance for the fourth quarter.

Clearly, whatever device it is, it must have a lot of penetration in the market if Netflix thinks it will have that much of an impact on their earnings so quickly. While it could be  the PS3 or the Wii, if it's a gaming console, my money is on the Wii. To date, Sony has sold about 9M PS3 units in the U.S., while Nintendo has sold more than 25M Wii consoles. When Netflix streaming rolled out on the Xbox 360, 10% of Netflix's members used the service within three month, pushing more than 25M GB of video. Based on those numbers, I don't think the PS3 has a big enough install base to impact Netflix quick enough.

In order for Netflix to get a lot of traction quickly in the remaining two months of this quarter, the service needs to be coming to a device that has a really large reach. What other device in the home has an install base large enough to make it relevant? The Wii, Xbox 360 and PS3, in that order, are the only devices that have a large enough install base in the living room. The only other possible device I can think of would be a set-top-box, through a cable operator, but most of them would see Netflix as competition.

It's also interesting to note that Netflix launched their streaming service on the Xbox 360 almost one year ago, on November 19th. Many have speculated that Microsoft's deal with Netflix includes Microsoft having an exclusive deal for one year, to be the only gaming console to support Netflix streaming. If that is in fact the case, that exclusivity would be ending in 27 days and it would make sense that Netflix would be talking about a new CE device just a few weeks before.

  • DC

    Awful choice quality wise, if true. The Wii is not an HD device.

  • Charles

    The Wii’s quality will be horrid.

  • What other device could it be then? I can’t think of any other device that has a big enough penetration in the living room. It could be the PS3, but with only 10M consoles in the U.S. to date, is that enough of a footprint for Netflix to raise their guidance for the fourth quarter, with only two months left?
    Keep in mind, earlier in the year, at least two surveys were asking if Wii owners would use Netflix on the device if they could get it:
    http://kotaku.com/5177710/update-netflix-looking-into-movie-streaming-on-the-wii
    That’s not a guarantee it will happen, but I think it’s crazy not to think it could happen soon.

  • Dave

    I don’t know much about the business side of things but could Netflix work a deal where they could profit of PS3 sales? Seems like Netflix on the PS3 would add a huge selling point for the console. Right now that is the biggest advantage the Xbox has in my living room, live streaming is invaluable with my media setup. If the PS3 could stream Netflix movies I would have picked one up months ago. I would move my old beat up Xbox to another room and run my living room media center off of a PS3. Just a thought, trying to figure out how Netflix could increase profits by going with the better technical option.

  • CM

    Probably the iPhone Netflix already has a living room solution.

  • I think the video quality will be fine and the WII will be a good choice – i regularly watch You Tube and Mega Video clips through the updated OPera Browser and the quality is reasonably good on my 32″.

  • At anycase maybe is not the time for thw wii, Netflix execs are looking for a more overseas developed box for their overseas-outside-US content offer.
    I think if is it, the PSP3 is maybe as good as the wii, and Sony is a big player on LCD TV sets sales, so maybe a better partnership option in the long term…

  • adaptateur

    I had believed that netflix streaming on the current gen wii is pretty impossible since it lacks a hard drive. But i am happy to know that netflix streaming is coming with wii. I hope it will work as mentioned here. Thank you!

  • todd schnell

    So we now know that PS3 got Netflix some weeks ago. Whats up with Wii then? Was this rumor just wrong, or is it still coming to Wii? I can’t find an answer to this, and Wii really needs this feature.

  • LT

    Good point, im sure your probably right, Wii would be a good idea!

  • Just been reading this forum and found it interesting and useful cheers everyone.

  • SB

    I’m so excited about Netflix Streaming New Device. I was so glad to hear innovative news about this. Indeed a smart article. Cheers!