By Prince McLean

Published: 07:00 PM EST

Citing an unnamed source described as "an industry executive familiar with Netflix’s plans," an industry trade journal is claiming that Netflix will soon offer its Watch Instantly streaming video service on the iPhone, iPod touch and the Nintendo Wii.

The brief report by Multichannel News describes the move as the next step for Netflix' content, which currently streams to Windows PCs, Macs, the Xbox 360, TiVo DVRs, the Roku, and certain TV and Blu-Ray players built to support video downloads.

Netflix Watch Instantly vs iTunes

Unlike Netflix' DVDs-by-mail service, its Watch Instantly library offers much less variety, with limited popular content such as recent movies and TV series. Its older titles and oddball independent films are available for immediate viewing however. The Watch Instantly service is also included for viewing at no extra cost over the base Netflix subscription, in contrast to iTunes' pay per view pricing.

Unlike media purchased or rented from iTunes, Netflix' streaming content plays back directly with no download. That requires no local storage on the playback device, but results in playback quality that is dependent upon the available network bandwidth. With iTunes and the Apple TV, content is progressively downloaded, enabling users to obtain HD content even with a slower connection, albeit with a longer wait.

Having a movie downloaded locally before or during playback makes reviewing or fast forwarding scenes quick and fluid. Netflix' streaming video has to stop to buffer the stream if it is paused or the playback point is changed, and simply can't do anything if a network outage occurs. In contrast, an Apple TV can be loaded with content and unplugged for remote playback, just like an iPod.

The advantage of Netflix' instantly streaming video is that little or no storage is required. If the iPhone and Wii are powerful enough to decode the live stream, customers may appreciate having a number of titles to watch on demand without consuming any available storage space, or in the case of the Wii, without needing to add some type of offline storage.

Hardware acceleration and mobile network access

Netflix uses Microsoft's DRM to protect playback of its streaming video, which requires Windows Media Player or Microsoft's Silverlight web plugin, which is akin to Adobe Flash. Dedicated devices like the Roku box use hardware decompression to deliver low cost playback.

Whether the iPhone or Wii could decode quality video only using software may be an issue, as Netflix playback even on the more powerful Apple TV has been cited by some as not practical due to its lack of any Windows Media codec hardware acceleration.

Video playback over AT&T's mobile network would likely also be prohibited by any Netflix streaming player app, making any iPhone version WiFi only, in line with other video streaming apps such as SlingPlayer Mobile.

Potential for HTTP Live Streaming

As a workaround to the iPhone's intentionally missing support for Windows DRM, Netflix could also take a page from Google and leverage the native support in iPhone 3.0 for HTTP Live Streaming, which plays streaming video to the iPhone and iPod Touch using standard MPEG AAC/H.264 codecs over familiar web-based protocols.

At the launch of the iPhone, Google shifted its Flash-based YouTube service to also support H.264 at Apple's behest, allowing the iPhone to skirt the primary need for Flash playback while also delivering high performance, hardware accelerated video playback using open protocols.

Support for HTTP Live Streaming will also be built into QuickTime X playback for Snow Leopard, and appears to be slated for adoption in the next revision of Apple TV. Third parties will also be able to implement HTTP Live Streaming on their own devices.