A big hoopla was made in the games and tech blogosphere today when Microsoft bragged about its exclusive partnership with Netflix. The agreement brings streaming Netflix movies to the Xbox 360, and not to competing consoles. (Of course there are still plenty of other non-gaming options.)
As Crispy Gamer’s Kyle Orland points out, this exclusivity has been known about ever since the partnership began last summer. In other words, today’s reports messed up. (And for the record, I previously overlooked the deal when asking if the Playstation 3 would ever get Netflix support.)
Nonetheless, I think the question of how long Microsoft will hang on to this partnership is perfectly valid. Microsoft has stayed quiet on that matter, fitting with consumer tech companies’ natural secretiveness about exclusive deals. Understandably, the company doesn’t want people glancing at their watches. If you’re on the fence about which console to buy, and Netflix support is a major consideration, you’d obviously be less concerned if you knew when, if ever, the service would migrate to all consoles.
So you have to wonder who stands to gain the most from the partnership. The advantage for Microsoft is intangible. It’s essentially a selling point for the console, but there’s no way to tell exactly how well this is working. For Netflix, the Xbox 360 is another set-top delivery box, but it’s a big one. In February, Netflix and Microsoft said 1 million people had signed up for a free Netflix trial over the Xbox 360, potentially translating to a lot of new customers.
On the other hand, Netflix is missing out on the opportunity to be on the Wii and the Playstation 3. I’m not privy to the details of the agreement, but as all the consoles get bigger install bases, Microsoft will find it harder to keep Netflix by its side unless it threatens to pull support, which I doubt will happen.
We don’t know specifically how long the deal between Netflix and Microsoft will last, but when the contract expires, I expect Netflix to cozy up to the Xbox 360′s competition.