Joystiq: So the new experience, we saw a brief preview at E3. Some of us also have the new dashboard update already. So, what are the major changes that users can expect from the last version to now?

Steve Swasey: The coolest thing is that you will be able to choose movies right on the Xbox 360. It used to be that you had to go to your queue on your PC or on your Mac, or go to the Netflix website on your PC or your Mac, and then add movies to your instant queue. That has changed now. The movies just show up on your Xbox. I don't know if you saw this demonstrated, I don't think they demonstrated it at E3. Maybe they did. There is just the list of movies that are available to add to and then you can just click on it right there and add it to your queue or watch it right on the Xbox. So you don't have to go back to the PC or to the Mac at all.

Does that search function work two ways? Can you add something on your Xbox to your mail queue and have something that is not available on Watch Instantly sent to you?

No.

It is just the Watch Instantly titles.

Correct.

Will there be more reviews you can read online on the Xbox?

No, we haven't announced anything like that. Adding the list of movies is still a pretty big leap forward. So we are really pleased with that. The adoption of the Xbox .... Xbox gold members' adoption of Netlfix is just an outstanding thing. More than one million folks have done it on the Xbox. I think back in February something like 1.5 billion minutes had been watched. So it has been really well embraced by the Xbox community, by the gold members.

Do you get breakdowns of all those numbers, like how many people are watching via Xbox and what they are watching and how many minutes they are watching and how many new signups you have via the Xbox? I don't know if that is even a stat you can track -- how many people are signing up just because of the Xbox functionality.

It is nothing that we disclose. There is some stuff that we like to keep to ourselves for competitive reasons. What we have announced is that more than one million Xbox gold members have watched more than a billion and a half minutes of movies and TV episodes via the Xbox 360.

The social integration and friend lists on Xbox Live are opening up with the new Netflix experience. For instance, you can now have your status say exactly what you're watching, when before it just said you were in the Netflix application. Are you all expanding any of those social features?

Well there is the movie party, which is another pretty big leap and pretty exciting. I am saying this in a very positive way. I don't want this to come across negative. It is very whimsical. You have the movie playing and then you have the row of avatars right there, you and your buddies. Seven people can be watching the same movie at the same time and your avatars are showing. I just think that is delightful and wonderful. And it is just a new way of enjoying movies.

So that is another great leap from Xbox with Netflix. And we are always looking to improve the experience of Netflix, whether it is adding more devices or adding functionality to devices we have such as the list of movies that you can choose and add to your que right there from the Xbox. So there is nothing we have announced about any other activity in the friends community or anything, but we are always developing.

Netflix as a pretty robust application section on the website of third party apps that work with Netflix. There is Twitter, iPhone integration, etc. Are you all thinking about an official iPhone application at any point or are you happy to let third parties develop that stuff?

"Our goal for streaming is to be ubiquitous, and to have movies and TV episodes from Netflix streaming to whatever device you watch movies on."

Well, two responses to that. We are very open. We opened our API's last year, and believe in the Internet being an open source for development and for solutions. So we are really pleased with the response from the developer community on our open API's. Obviously, our goal for streaming is to be ubiquitous, and to have movies and TV episodes from Netflix streaming to whatever device you watch movies on, whether that is widescreen TV, or a game console, or a mobile device, we want to be on that.

Right now we are focusing the Xbox 360, the Blu-ray disc players, and the TV's. Just a couple weeks ago we announced that Netflix would be streaming on the Sony Bravia. We had already announced Vizio and LG Electronics having televisions that are streaming from Netflix. So we are working on the widescreen and the big screens, but at some point we will certainly be interested in being on mobile devices as well.

When you mentioned Blu-ray players, most Blu-ray owners in our audience are PS3 owners. Have you guys been in talks with Sony about bringing it to the PS3?

Well we announced the Sony Bravia; that is a completely different division. We are not commenting on any of those agreements we may or may not have with any specific manufacturer. We announced the Xbox as our game platform and we are very pleased with it. As I mentioned, more than a million gold members are using it. So we are very pleased with that. But we are interested in, obviously, lots more content, lots more devices, and continuing to build up functionality.

We had some users send us some surveys they had been sent about Netflix possibly coming to the Wii. "If this came to the Wii would you want to use it?" So obviously we figured that must be in development.

There was a lot of chatter about that in the blogosphere. We have 10.6 million members and we survey them all the time for every aspect of the business, whether it is devices that we might want to look at, or pricing, or content, or logistics and delivery. We field several 100 surveys at a time. We can do quick email surveys to our members overnight, because we are a web based company.

A lot of chatter went on around that. And it was just another survey of Netflix members for consideration.


Some of the content is not party mode compatible. Why would a content owner not want certain content to be party mode compatible?

Well, you really have to talk to the content owners, those who license it. We want to provide as much of an outstanding user experience as we can, and we still think there is terrific content. There are wonderful movies and TV episodes, more than you can watch in a lifetime, even with those that are not available for the party mode.

We are obviously working with the studios and those who license the content, but some just are not available. But we continue to work to broaden the catalogue.

The party mode itself, does every person in that party need to have the application and be a Netflix subscriber or is it open to everyone?

I think I know the answer to that, and it is yes. But before you quote me on that, let me circle back, because I am almost certain it is yes, but for some reason now I am just wondering if that is correct. But logically you would have to be a gold member, and logically you would have to be a subscriber. So I am almost certain it is yes, but let me verify that. Don't quote me on that yet.

UPDATE: Steve got in touch with us later that day to inform us "Yes, all seven people in the movie party have to be Netflix members and Xbox Gold members."

Was the party mode Netflix's idea or did Microsoft suggest that? I know Last.fm, one of the other social media partners that is coming, has a party mode as well.

The beauty is that great ideas have many parents and failure is an orphan. But we will tip our hats to Microsoft. They are a very innovative company. Xbox is a very innovative console. It is their development and we are certainly pleased to be a part of it, but we give all credit to them. I was at E3 and I know you were. Project Natal just blew me away. So they have got the really smart creative, innovative people up there and we are seeing the results of it with party mode and Project Natal ... it is a great concept.

Were those demo screens they were showing in the Natal demo where the woman is browsing through the movie queue and she is using voice commands, was that using a pseudo-Netflix interface or was that kind of their own sample screens?

That has got to be their own. You will have to ask them. I don't know that we have actually worked on any of the software yet for Natal. I just don't know yet. I haven't heard.