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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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July 14, 2008 11:26 AM

E3: Microsoft partnering with Netflix, NBC, others to challenge as top video destination

Posted by Benjamin J. Romano

LOS ANGELES -- Microsoft is spending a major chunk of its press conference at the video game industry's big annual conference here describing new television and video distribution deals for the Xbox Live network, which has more than 12 million members.

The company is distributing television shows from NBC, movies from Universal Studios, and in probably the biggest piece of news: adding a huge library of movies through Netflix.

Speculation about whether Microsoft would do a deal with Netflix has swirled since at least March of last year, when Reed Hastings, founder, chairman and chief executive of the DVD-by-mail video-rental service, joined Microsoft's board of directors.

The details of the partnership and how Xbox Live subscribers will get access to the Netflix library weren't fully fleshed out. I'll update when I learn more.

See this post for more from Microsoft's E3 press conference.

Update, 12:59 p.m.: The partnership will allow consumers to "instantly stream movies and TV episodes from Netflix to the television via the Xbox 360 video game and entertainment system," according to a more detailed statement from Microsoft.

The service will be available free to people who are both Xbox Live Gold members ($50 a year), and Netflix subscribers.

When it launches in late fall, more than 10,000 movies and TV shows will be available for starters. Coupled with the existing content available through the Xbox Live Marketplace, the game console will offer more on-demand video than "any other device connected to the TV," Microsoft boasted.

More specifics on how Netflix on Xbox will work:

"From the Netflix Web site, members simply add movies and TV episodes to their individual instant Queues. Those choices will be automatically displayed on the TV screen via Xbox 360 and available to watch instantly. Once selected, movies will begin playing in as little as 30 seconds. In addition to instantly streaming movies to the TV, Xbox LIVE Gold members can fast-forward, pause and rewind, all using either their Xbox 360 Controller or Media Remote."

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