While I think the concept is neat, I think there are some major obstacles regarding streaming Netflix movies to the iPhone:
1)For those of you wishing to watch a full movie at the airport or other 3G area, I have news for you: Not in the next 5 years. Honestly, there are so many factors regarding this (here is just one): a)have you ever streamed a Netflix movie over your home WIFI (such as my PS3)?...it stinks...so if my 20Mbit downstream/2Mbit upstream connection (max I can pay for) stinks using Netflix, don't get your hopes up on abismal wireless access points (free or paid) at public sites like airports and coffee shops or libraries that have dozens of users sharing a single 5-15Mbit connection. And don't get me started about hotel WIFI connections.
2)Netflix itself would have to have an enormous internet pipe...again with my point about their current stinky streaming over your home network what makes me/you believe they can roll this out and add tens of thousands (if not millions) users and have the streaming
IMPROVE?
3)Are you really going to sit and stare at a 4" diagonal screen for 1.5 hours watching a movie? I don't think often...sure, maybe you will at first but I bet the novelty will quickly wear off. Or those rare times that you are stuck at an airport or similar predicament. Nice to have, but I doubt people are going to sit in a coffee shop or library for 1.5 hours watching a movie (nor will they be allowed to by the owners)...and although I travel a lot, it is very rare that I am actually at an airport, sitting down, for enough time to watch a movie...let alone hear the movie with all the announcements and loud people.
4)Battery life...I can just imagine how much streaming a movie over WIFI would drain the iPhone battery.
I think there are a lot of technical roadblocks to this becoming a true reality for the masses even within 5 to 10 years. Youtube is constantly buffering their simple 6 minute clips and you believe Netflix is gonna be able to stream a full movie that is 20 times longer? There is also the problem that Netflix's movie list of streamable content is pretty weak making it not very appealing.
I think the future of movies, in general, will
eventually be some kind of stream or digital copy and 20+ years from now physical media (dvd, bluray, cd)
may disappear. But there are huge technical hurdles, copyright hurdles, and adoption hurdles to overcome before it's mainstream.
I want to stress that although this Netflix topic may be possible right now, it will be very limited and likely very shoddy on many levels. It's a great business relationship, however, for Netflix and Apple and maybe even ATT.
20 years from now, this Netflix offering is likely the the very beginning of the streaming revolution.
-Eric