According to LG, the deal reflects a consumer market shift from a preference for physical media to web-based distribution methods — a trend that has been identified within the adult entertainment space, as exemplified in statements like Rob Zicari’s notorious proclamation that “DVD is dead.”
"Consumers crave compelling and immediate content, and the Netflix online streaming movie feature can provide instant gratification," K.I. Kwon, president of the Consumer Electronics Division of LG Electronics USA, said. "This alliance underscores LG's goal of developing smart technologies that deliver flexibility, convenience and control to consumers."
With the new LG set-top box, Netflix subscribers can watch movies streamed from the Netflix website on their large-screen home theater HDTVs. The technology collaboration supports the Netflix strategy of offering a multi-dimensional — or "hybrid" — service that offers Netflix members a number of ways to receive rented content for their monthly fees.
"Internet to the TV is a huge opportunity," Netflix founder, chairman and CEO Reed Hastings said. "Netflix explored also offering its own Netflix-branded set-top boxes but we concluded that familiar consumer electronics devices from industry leaders like LG Electronics are a better consumer solution for getting the Internet to the TV."
The announcement advances the Netflix goal of making electronic delivery — including future high definition content — a meaningful addition to its existing DVD delivery platform. Netflix took its first step to electronic delivery when it enabled members to instantly watch rented content on their personal computers in 2007.