TV boxes let Netflix users bypass mail delivery

The Netflix box, made by Silicon Valley startup Roku Inc., is the first of several devices that will pipe Netflix's streaming service to TV sets.

LG Electronics is expected to include the streaming capability in a Blu-ray DVD player that it plans to debut during the second half of this year.

Without providing further details, Netflix has said two other major consumer electronics companies are working on set-top boxes for its streaming service.

Hastings is confident that the demand for DVD rentals will remain strong for at least several more years, partly because movie studios aren't ready to fully embrace digital distribution.

But as technology makes it easier to rent and buy movies within a few minutes instead of waiting for them to be delivered through the mail, Hastings realizes his Los Gatos-based company won't survive unless it evolves.

That's why Netflix has poured more than $40 million into its streaming service, called "Watch Instantly," and is now trying to encourage its subscribers to use it more frequently even though it doesn't generate more revenue.