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NetFlix sics troops on Apple TV

Trumpets set-top box. Plans 100 more

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NetFlix is going toe-to-toe with Apple TV. And then some.

This morning, the get-your-movie-rentals-through-the-mail pioneer announced it will soon team with LG Electronics to offer a brand new set-top box that streams movies straight to your television. But that's just a start. In a conversation with Hacking Netflix.com, CEO Reed Hasting said the company plans to launch a entire army of NetFlix-happy hardware devices.

"Our model is that we don't want one Netflix-branded box, we want to see 100 Netflix-capable boxes," Hasting told the NetFlix news and info blog. "We want to be embedded in high-def DVD players, Internet games, dedicated set-top boxes, a wide range of options."

In this way, NetFlix hopes to challenge not only Apple, but all those other net-centric companies struggling to make a buck from straight-to-TV movie deliveries, including Amazon, which offers its Unbox service to TiVO users, and Microsoft, which is shoving video onto the XBox 360 via something called Windows Live Video.

NetFlix calls itself "the world's largest online rental service." Delivering DVD rentals through the post since 1998, the company now serves over 7 million subscribers. And for nearly a year, it's offered a "Watch Instantly" option that allows all 7 million to stream flicks straight onto their desktop PCs and laptops.

But Netflix's partnership with LG marks the first time the company has extended the Watch Instantly model directly to TVs. The LG set-top box will debut in the "second half" of this year, likely linking customers to several thousand movies and television shows. Though NetFlix now offers over 90,000 DVDs for rental through the mail, it serves up around 6,000 via Watch Instantly.

What exactly will this LG set-top box be capable of? How much will it cost to stream videos? NetFlix isn't saying. It wouldn't even respond to our request for an interview.

According to NetFlix, the current Watch Instantly service is "free." But this simply means that you needn't pay anymore than you're already paying to receive rentals through the mail. Your use of Watch Instantly is restricted according to the cost of your subscription.

You'd have to say that NetFlix will continue using a subscription model with the LG set-top and any other TV-compatible devices. After all, that's how the company built its rather sizable success. The NetFlix phenomenon didn't take off until the company buried an early pay-per-rental model back in 1999.

Can NetFlix challenge the likes of Apple and Amazon? We should hope so. According a report from MacWorld, Steve Jobs only sold 400,000 Apple TVs between February and early December. That number likely spiked during the holiday season, but the iTunes-centric device hasn't exactly set the world on fire. And it's the most popular of the lot.

A subscription model might set NetFlix apart from the Apple TV. But rumors abound that Jobs and company will soon introduce its own rental and subscription services. NetFlix most important gamble may be the decision to open its service to all sorts of third-party devices. Apple would never do that. ®

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