Netflix debuts new set-top box

The first dedicated set-top box capable of displaying movies streamed from Netflix on a TV screen goes on sale Tuesday from the Netflix Web site.

The $99 box is being sold by Roku, a privately held, Saratoga, Calif.-based maker of digital music players and other consumer devices.

The Netflix Player by Roku, about the size of a chunky paperback book, connects to the TV via HDMI, component or composite video, or S-Video, and connects to the Internet via Ethernet port.

The player also is Wi-Fi enabled so it can be connected to the Internet via a wireless home network.

The custom-designed user interface displays the titles stored in a Netflix subscriber’s “Instant” queue on the TV screen, where they can be accessed and played using the player’s remote control.

The player does not support direct access to the Netflix library from the TV screen, however; movies must still be added to the queue from a PC.

“That’s a major improvement versus the clutter of trying to choose from 10,000 films on the TV,” Netflix chairman/CEO Reed Hastings said in a statement. “There are no extra charges and no viewing restrictions. For a one-time purchase of $99, Netflix members can watch as much as they want and as often as they want without paying more or impacting the number of DVDs they receive.”

The Roku player is the first Netflix-enabled set-top box to hit the market, and more are on the way.

In January, Netflix announced a similar deal with LG Electronics. That device is expected to ship in the fall.

And last month, Hastings said during Netflix’s first-quarter earnings conference call that two other deals are in place and are expected to bear fruit later this year.

Hastings did not identify the hardware partners in those deals but indicated they involve embedding the Netflix interface in multi-purpose devices rather than dedicated STBs.

In February, rumors circulated that Netflix would partner with Microsoft to deliver movies through the Xbox Live marketplace, but neither company has confirmed those reports.

Though Roku is marketing the Netflix player exclusively to Netflix subscribers, the device is capable of playing video from other Web-based sources, according to Roku VP of consumer devices Timothy Twerdahl.

“It’s an open environment,” Twerdahl said. “It supports a lot of different codecs, a lot of DRMs, so it’s not limited to just playing movies from Netflix.”

For now, however, the company has no plans to sell the box through retail channels.

“We wanted to sell directly to Netflix subscribers, using the Netflix Web site. But that doesn’t mean we wouldn’t work with other services in the future,” Twerdahl said.

Unlike many similar devices, the Roku player does not include a hard drive—“one reason it’s so inexpensive,” Twerdahl said—although it does contain a small amount of on-board flash memory to ensure smooth playback of movies.

“This has been fully vetted by the studios,” Twerdahl added. “It has HDCP, CGMS-A and Macrovision on all outputs so it’s completely secure.”