Netflix lifts time limits, invites subscribers to stream away

NEW YORK -- Netflix nflx kicked off a potentially important week for the fast-growing Internet video business on Monday with a policy change that encourages subscribers to watch movies and TV shows streamed from its site to their PCs.

Netflix eliminated time restrictions on its video-streaming service for all subscribers except those to its $4.99-a-month plan. Before, customers had about an hour of streaming for each dollar they paid for mail-delivered DVDs: For example, those who pay $16.99 a month got 17 hours of streaming time.

"In talking with members … the idea of streaming unlimited movies and TV episodes on a PC resonated quite strongly," Netflix chief marketing officer Leslie Kilgore said.

But analysts say the announcement may have been at least partly driven by the widespread expectation that Apple aapl CEO Steve Jobs Tuesday will unveil a plan to compete with Netflix, Blockbuster bbi and cable and satellite video on demand (VOD) services — by renting recent flicks on iTunes' online store.

Pali Research analyst Rich Greenfield said in a note that Jobs likely will announce an agreement with Fox, and possibly other studios, that enables iTunes to sell and rent their movies the same day they're available on DVD. Up to now, Disney has been the only studio that provided downloads of new flicks through iTunes.

Greenfield says that if he's right, then it would be a blow to cable and satellite companies: Their VOD services usually don't get new movies until several weeks after they're available on DVD.

Netflix, with more than 7 million subscribers, could be affected, too, "because of the clout that Apple carries," says Jackson Securities analyst Brian Bolan. "It's connected, via iTunes, to millions of customers. Those are all potential Netflix customers."

Blockbuster also is in the game with its stores, an online service with more than 3.1 million subscribers, and website Movielink, which rents and sells movies and TV shows. Netflix spokesman Steve Swasey says it's a coincidence that its announcement comes just before Jobs' address to Macworld.

Netflix says it has deals with all of the major studios, except Disney dis, to make about 6,000 movies and TV shows available for streaming. Most movies have already run on premium cable channels such as HBO. Some TV shows, including NBC's Heroes and 30 Rock, are available the day after they first air.

Netflix's streaming service works only on PCs with Microsoft's Internet Explorer, not on Apple computers. Those with Internet connections of at least 3 megabits per second get DVD-quality video. Those with connections of about 1 mbps will get less-vivid pictures.