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 - Cramer's Take - Stockpickr), Yahoo! (YHOO - Cramer's Take - Stockpickr) 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 - Cramer's Take - Stockpickr) NBC Universal, Sony Pictures (SNE - Cramer's Take - Stockpickr), Metro-Goldwyn-Mayer Studios, News Corp.'s (NWS - Cramer's Take - Stockpickr) 20th Century Fox, Viacom's (VIA - Cramer's Take - Stockpickr) Paramount Pictures, Time Warner's (TWX - Cramer's Take - Stockpickr) Warner Bros., New Line Cinema and Lionsgate (LGF - Cramer's Take - Stockpickr).

"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."