Netflix sells out of streaming set-top box

Partner Roku reports two-week delay

By Danny King -- Video Business, 6/10/2008

JUNE 10 | Netflix has sold out of its video-streaming set-top box three weeks after its technology partner released the first machines, which allow Netflix customers to stream videos directly to their TV sets.

Digital-media technology company Roku Inc., which helped launch Netflix Player by Roku on May 20, will need about two weeks to fulfill current orders, said Amy Bonetti, a company spokeswoman with an outside firm. The delay for the boxes, which are made in China and retail for $99.99, will continue for another six to eight weeks.

“We sold so many out of the gate,” said Bonetti. “They’re selling way better than we thought.”

Bonetti wouldn’t disclose how many set-top boxes have been sold. Netflix spokesman Steve Swasey referred questions about sales to Roku.

Netflix CEO Reed Hastings said at a May 28 investors’ conference that he hoped that partnerships with various consumer-electronics companies such as Roku would help enable as many as 10 million customers to have TVs that could connect to Netflix via the Internet by the end of next year. Hastings, whose company had 8.24 million subscribers as of March 31, said he expects Netflix to more than double its subscriber base within a decade, with video-streaming services fueling growth after DVD rentals peak.

Netflix said in January that it would develop set-top streaming boxes with LG Electronics and other companies as Netflix competes with a growing number of movie-streaming or download services, including Apple TV and Amazon.com’s Unbox, which delivers downloads to TiVo set-top boxes.

Netflix’s streaming service for personal computers launched last year and has since boosted its content inventory to 10,000 titles from 2,000.