Multichannel News wrote a story a few days ago that Netflix’s Watch Instantly streaming service would soon have an app in Apple’s App Store as well be available on the Nintendo Wii, citing an industry executive familiar with Netflix’s plans. Both of these devices would seem to play well into Netflix’s strategy of getting its service on as many consumer devices as possible (already it’s on the Xbox 360, Blu-ray players, the Roku box and built into a few TVs). But this rumor is interesting for a few reasons.

First, Netflix on the iPhone would be awesome, but you have to wonder if Apple wouldn’t worry about it cutting into services it already provides. That has been the basis for a few app rejections, and it would seem that with on-demand movie streaming, it would remove at least some of the need to buy movies for your device through iTunes.

Second, talk of the service coming to both the iPhone and the Wii is interesting because of Netflix CEO Reed Hastings‘ position on Microsoft’s board of directors. While I’m sure Netflix’s overall agenda is outside the influence of Microsoft, remember that Netflix streaming is currently only available on Microsoft’s Xbox 360, and none of the other gaming consoles. This is a big advantage for it in terms of being a living room entertainment hub (which all of the consoles aspire to be).

And one would have to imagine that Microsoft would love to see a Netflix streaming app on its Windows Phones (the artists formerly known as Windows Mobile phones) before it sees it on iPhones. I’m not saying that will happen, but that it may come up between Hastings and Microsoft.

Third, and most importantly, if such an app were to exist, it would undoubtedly bring up the AT&T bandwidth restriction debate again. While AT&T and Apple allow apps like MLB At Bat to stream video over the network, other apps, like SlingPlayer, are restricted to stream video over WiFi only. AT&T has stated that it doesn’t want all this video streaming to further clog its pipes, which is also why it would likely restrict a Hulu app that was rumored a few months ago.

But streaming over WiFi is significantly less interesting than being able to do so over 3G. If a Netflix streaming app were to be released and limited to WiFi, you can be sure it wouldn’t dampen the booing of AT&T that has been going on recently. The fact of the matter is that eventually apps such as this are going to need to work over cellular networks and not just WiFi.

Again, the existence of a Netflix streaming app on the iPhone is very much a rumor based on one source, but it is interesting for the potential can of worms it opens.

[via Hacking Netflix]

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