Blog Post

Microsoft Expands Netflix Ties; Will Windows Media Center Appeal To The Masses?

imageMicrosoft (NSDQ: MSFT), which is trying to position Windows Media Center as the central place to watch TV shows — from the internet and from broadcast TV — on the PC, has landed its biggest content partner yet: Netflix (NSDQ: NFLX). Starting Wednesday, Windows Vista Home Premium and Windows Vista Ultimate users will be able to watch Netflix movies and TV shows instantly from within Windows Media Center as long as they are also Netflix subscribers. The Netflix deal follows others Microsoft has reached this year to bring sports content from CBSSports.com, Fox Sports and MSNBC.com to Windows Media Center.

Why not just watch Netflix content (or other online content for that matter) in the browser, like so many are already doing? Ben Reed, the senior product marketing manager for Windows Media Center, told paidContent that there continued to be a demand for one standard user experience: “The use of familiar controls, of pause, fast forward, rewind. That’s one of the pain-points we hear from consumers about the myriad ways you can consume TV shows and movies online. Each one has a different search and discovery experience; each one has a different player; some work great full screen; some don’t.” Microsoft is also adding some new features, including an improved way to search through Netflix movies and TV shows.

Reed would not provide details about the structure of the Netflix-Windows Media Center deal, but Microsoft and Netflix already have deep ties. Netflix CEO Reed Hastings is a Microsoft board member. Netflix also uses Microsoft’s Silverlight media player to power its in-browser player, and Netflix movies and TV shows have been available since last fall via Xbox Live. Microsoft said in February that one million Xbox owners had activated Netflix streaming on their consoles. “There is an agreement in place around referrals of members to Netflix in the same way … it works with Xbox,” Reed said.

Windows Media Center is also getting a new look in the next version of Microsoft’s operating system, Windows 7. Reed said that coupled with those changes, new content deals would make Windows Media Center more attractive to the “masses.” He said that there were now 13 million unique monthly Windows Media Center users, up from the 10 million Microsoft announced it had in January. As for newer services like Boxee, which also provide a central place to watch Internet videos as well as other content on the computer, Reed noted Boxee’s on-again, off-again relationship with Hulu. “Those are the things that I think are going to be a challenge for services like that.”