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Microsoft announces Netflix deal

Service free to Netflix subscribers who hold Xbox Live Gold accounts

Microsoft has officially announced a deal with Netflix which will allow Xbox 360 users to stream thousands of movies over the Internet.

The service to be offered at no additional cost to Netflix subscribers who also hold Xbox 360 Live Gold memberships.

Netflix currently has 8.2 million subscribers; Microsoft has reported 12 million Xbox Live users.

Netflix's streaming service currently offers more than 10,000 movies and TV shows and is distinct from its DVD rental program.

"It's a totally different proposition, so it's quite important," Forrester Research analyst Paul Jackson told Bloomberg.

"In the future, everything is going to downloads. It's ludicrously inefficient to ship all those silver disks."

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