Quote from Xbox.com:
Los Angeles—An exciting new home theater experience is coming to living rooms this holiday season. At E3, Microsoft and Netflix, the world’s largest online movie rental service, today unveiled an exclusive partnership to offer the ability to instantly stream movies and TV episodes from Netflix to your television via Xbox 360®.
Xbox 360 will be the only game system that lets you instantly watch movies and TV episodes streamed from Netflix. This movie-watching innovation will be available to Xbox LIVE® Gold members who are also Netflix subscribers, and will let those users enjoy streaming movies from Netflix on Xbox LIVE at no additional cost.
A growing library of more than 10,000 movies and TV episodes will be available from Netflix when it launches on Xbox LIVE in late fall, with more choices added over time. Through this agreement, along with the existing Video Store, Xbox 360 will be home to more movies and TV shows on demand than any other device connected to the TV. Xbox LIVE quickly and easily connects you and your friends to the entertainment you want—with no PC required for viewing.
“Watching movies at home will never be the same. Netflix on Xbox 360 is an entertainment first, and we are bringing friends together with the best in entertainment content like no other device in the living room, ” said John Schappert, corporate vice president of Interactive Entertainment LIVE, Software and Services Business at Microsoft . “We are creating a completely new social entertainment experience, and Xbox 360 will be the only video game system where you can access your library of instantly streamable movies from Netflix and turn any room into a virtual movie theater.”