Microsoft announced on May 19 an expanded relationship with online video rental company Netflix that will allow Windows Media Center (WMC) users who have a Netflix account to stream content from the site. Users can choose from more than 12,000 movies and TV episodes.

For the moment, the program is limited to users running Windows Vista Home Premium and Ultimate users. Users will be able to search the entire Netflix library from WMC, and manage both Instant and DVD Queues. Microsoft says WMC will also take advantage of Netflix’s “recommended” categories.

“Using the two together is easy and convenient,” Microsoft's in-house Windows blogger Brandon LeBlanc wrote on the company blog The Windows Experience. “In Windows Media Center, a new Netflix tile will appear under 'TV + Movies.' To stream movies and TV shows from Netflix, just click on the new Netflix tile and log in with your Netflix account.”

The blog post includes two walk-through videos explaining the program interface and how it interacts with WMC, where it is powered by Silverlight, a Microsoft Web browser plugin that enables video playback. However, a report from Seattle-based technology blog TechFlash says one thing users won’t be able to do is stream the content to other PCs or televisions around the house, in order to avoid competition with Microsoft’s Xbox 360 game console, which also supports Netflix streaming.

At E3 in 2008, Microsoft announced a deal to distribute Netflix videos over Xbox Live for all unlimited rentals users with Gold memberships. After a software upgrade, Xbox 360 owners with a Netflix Unlimited subscription and an Xbox Live Gold subscription in the United States are able to stream some 12,000 movies and TV shows directly from Netflix.

Online retailer Amazon has also jumped into the mix with Video On Demand HD service, which gives users the option to rent more than 500 HD TV shows and movies. Customers can view the HD content on their televisions through set-top devices including the Roku digital video player, TiVo Series3, HD, and HD XL DVRs, and the Sony Bravia Internet Video Link.

Alongside its partnership with Microsoft (and others), Netflix also has a "streaming feature available to eligible subscribers. “Watch Instantly” enables subscribers, at no additional cost, to stream near-DVD quality movies and recorded television shows instantly, depending on the subscriber's Internet connectivity.

Initially, the feature offered subscribers one hour of media for approximately every dollar they spent on their subscription. (A $16.99 plan, for example, entitled the subscriber to 17 hours of streaming media.) However, in January 2008 Netflix lifted this restriction.