Netflix Still Needs a Fix

Also, streaming content can suffer from service disruptions. It will require an Internet connection with a minimum bandwidth of one megabit per second. Better connections will result in a higher quality experience.

"The bit-rate won't be great, which means you're not going to be able to deliver high-definition content," says Sinnreich.

On the upside, Netflix said most subscribers' movie selections will begin playing in their browser in as little as 10 to 15 seconds, following a one-time installation of a simple browser tool.

"This market really takes off when fiber to the home and next-generation broadband becomes more common over the next three to five years and high-definition movies on demand can be streamed on the Internet," says Sinnreich. "Everyone knows that's where it's going and everybody wants to have a stake in that business, including Apple, Microsoft, Google (GOOG), Yahoo! (YHOO) and all the cable companies."

Netflix said most of the major and many independent studios are "supporting" the introduction of the new feature, including General Electric's (GE) NBC Universal, Sony Pictures (SNE), Metro-Goldwyn-Mayer Studios, News Corp.'s (NWS) 20th Century Fox, Viacom's (VIA) Paramount Pictures, Time Warner's (TWX) Warner Bros., New Line Cinema and Lionsgate (LGF).

"Over the coming years we'll expand our selection of films, and we'll work to get to every Internet-connected screen, from cell phones to PCs to plasma screens," said Netflix CEO Reed Hastings in a statement. "The PC screen is the best Internet-connected screen today, so we are starting there."

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