Netflix Pushes 'Watch Instantly' as Streaming Picks Up Speed

LOS GATOS, Calif. - Netflix says its "Watch Instantly" streaming service is growing faster than expected, and the DVD-by-mail pioneer is betting that living-room devices — starting with Microsoft's Xbox 360 this fall — will finally bring internet video to the couch.

The company, which built its business on red envelopes, now lets subscribers stream thousands of movies and TV episodes at no extra charge. The catalog remains thin on new releases, but the price — free with a subscription — has proven compelling.

The Xbox deal, announced at the E3 video-game show in July, will put Netflix streaming before the console's more than 10 million online members. Standalone set-top boxes from Roku and others have followed.

"The envelope business pays the bills for a long time," a company executive said. "But the future is obvious, and we'd rather disrupt ourselves than let someone else do it."

The shift mirrors the angst in Hollywood, where studios are watching DVD sales — their most profitable business — decline while digital revenue remains small.

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Associated Press writers contributed to this report.

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