Roku, a company specializing in digital streaming media technology, makes the box, which sells for $100 and is available on the Web. Beyond the cost of the player, subscribers of Netflix, an online DVD rental company, would be able to access content from the Internet at no additional charge.
In launching the device, Netflix is going up against Apple for a place in people's living rooms. Apple last year started selling the Apple TV, which connects via the Internet to the company's iTunes music and video store. Through the device, people can rent movies and TV shows.
While Apple and Netflix are going after the same potential customers, their offerings are very different. Apple is focusing on new releases, which customers rent individually. Netflix, on the other hand, is offering unlimited access to older titles, or about 10,000 movies and TV shows from a library of 100,000, said James McQuivey, analyst for Forrester Research.
"They don't compete head to head on content, but they do compete for real estate in the living room," McQuivey said.
Both vendors are trying to build a customer base to sell more services in the future. Netflix, however, is also trying to give its 7 million subscribers another reason to stay with the company.
But Netflix's long-term goal is to get digital TV makers, such as Sony, Panasonic, and LG Electronics, to integrate the Netflix service with their products. "That's where this is heading," McQuivey said. Netflix "wants to be an ingredient in every video device in your home."
For Apple, Apple TV rounds out the company's "three-screen strategy," said Ross Rubin, analyst for the NPD Group. The company can now deliver video through iTunes to a Mac or Windows computer, the Apple iPhone smartphone, and the television via Apple TV.
A wildcard is movie rental company Blockbuster, which has yet to make a move for the home entertainment center. The company rents movies online for viewing through a PC. Blockbuster, however, is likely to offer its own player in the future. "I would be surprised if they don't do that to keep up," McQuivey said.
The Netflix/Roku box feeds off of the Netflix Web site, where subscribers can make a list of movies and shows they want to watch. Using the player's remote control, people can browse the list, read synopses, and rate what they watch. They also can fast forward and rewind the video stream.
The player has no hard drive, and software upgrades are automatically downloaded, Netflix said. The box can connect to the Internet through either a wired connection or Wi-Fi. The player is about the size of a paperback book.