Netflix are making a big move to a direct model.

Netflix and LG Electronics will deliver rental movies and TV series directly to TV sets, sidestepping the well-known red envelopes used by the DVD rental company.The companies announced Thursday that they will develop a set-top box that will allow users to stream movies and other content from the Internet to HDTV sets.

Netflix, which began to allow users to stream content to their PCs via the Internet last year, said the new system would bypass PCs. The companies said a networked LG player will be released to market by the second half of this year.

“Internet to the TV is a huge opportunity,” said Reed Hastings, Netflix’s founder, chairman, and CEO, in the announcement. “Netflix explored also offering its own Netflix-branded set-top boxes, but we concluded that familiar consumer electronics devices from industry leaders like LG Electronics are a better consumer solution for getting the Internet to the TV.”

Netflix said the move reflects its larger strategy to offer customers a variety of ways to rent and view movies and television programs. Those who buy the hardware will be able to rent titles cataloged on the Internet. Netflix already offers more than 6,000 titles via the Internet, and the company said it plans to expand its online catalog. The company offers more than 90,000 titles on DVD.

“Consumers crave compelling and immediate content, and the Netflix online streaming movie feature can provide instant gratification,” Ki Kwon, president of the consumer electronics division of LG Electronics USA, said in the announcement.

LG Electronics said the partnership will improve its position in the U.S. digital television marketplace.

I have no opinion about whether this will work but it is part of a mass of innovation that will somehow bear fruit soon. One of my predictions for 2008 is that we will see a moment when it finally becomes easy to both find and access Movies and High End TV Shows without having to wait for the show to air on a schedule. We will be able to have TV and Movies when we want - We will have it our way!

There seems to be an inevitability here that most agree with. Where I differ with some friends in TV is how quickly this will occur.

I think that enough progress will take place in 2008 to make 2009 the Annus Horribilis for Traditional TV that uses the artificial scarcity of its broadcast area and schedule as its economic model. TV will suffer as Newspapers are suffering.

So in a world where there is masses of great content to be had at any time, where is the value?

I think that it is in making it easy to find what you want - Navigation. Maybe just Google - But I doubt it - Maybe a series of Hubs that house niches - The Military Channel - The Opera Channel etc

These Channels would make it easy to find the good stuff - and also have a lot more information linked to the film and reviews.

Here it would be easy to share what you like and to comments on it. John Wayne fans unite and talk to each other about the Duke -

Films and Shows become the Social Objects that Hugh Talks about.

So what then will be left for the local TV stations - both private and public? I think that their domain is to leverage the national content and to win the hyper local wars. More on this as 2008 unfolds as some of my clients do the world to solve this challenge.