LG Blu-ray player to beam Netflix movies from Web

LOS ANGELES, July 30 Thu Jul 31, 2008 5:01am BST

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LOS ANGELES, July 30 (Reuters) - LG Electronics Inc. (066570.KS) on Wednesday said this fall it will start selling a new Blu-ray DVD player that will allow Netflix Inc (NFLX.O) members to watch as many as 12,000 films and TV episodes streamed directly from the Web to their TV sets.

LG and Netflix had previously said they would provide a set-top box in the second half of 2008, but gave few details.

Company officials said the LG BD300 Network Blu-ray disc player would be priced at "well under $500" and that Netflix members could stream films and TV episodes through the device at no additional price to their monthly subscription plans.

"If you're going to buy an LG to play Blu-ray, its a great extra to get streaming," said Netflix Chief Executive Officer Reed Hastings in an interview.

Netflix subscribers will be able to stream programs in standard definition -- not the high-definition level of Blu-ray.

Netflix offers Blu-ray DVDs through its by-mail service and said last week it will soon test price increases for those high-definition discs.

The DVD renter, with over 8 million subscribers, has been moving aggressively to extend its streaming service to TV amid increased challenges in the sector from Web giants like Apple Inc(AAPL.O) and Amazon.com Inc (AMZN.O).

Blockbuster Inc BBI.N, its chief rival for DVD rentals, also is expanding its digital offerings.

Netflix also has reached a deal to let members watch streamed content on Microsoft Corp (MSFT.O) Xbox 360 game consoles, has struck another set-top box deal with Roku and said it will announce another partnership later this year.

LG and Netflix said LG's Blu-ray player was the first to be bundled with a streaming service. While nonexclusive, LG said it has no plans to offer other streaming services yet.

"This is the first truly convergent product," said Allan Jason, vice president of digital media for LG Electronics USA. "This fall, we'll focus on Netflix. We have a strong story to tell and let the consumers decide," he said.

U.S. consumer awareness about Blu-ray is rising, but adoption of the technology still faces challenges due to price, and perceptions among consumers content with standard DVDs, according to research company NPD Group.

Until February, consumers were torn between two competing standards -- Blu-ray backed by Sony Corp (6758.T) and the rival HD DVD, backed by Toshiba Corp (6502.T), but the standards war ended in February when Toshiba threw in the towel.

Jason said LG expects between 3 million and 4 million Blu-ray players to be sold industrywide for calendar year 2008 and that this number should triple over the next few years. (Reporting by Sue Zeidler; editing by Carol Bishopric)

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