I currently have a 360. I currently have a Netflix membership of 2 movies a month. I am currently glad that 360 is getting the ability to instantly stream Netflix content.

Like I said. It helps both companys. It helps Netflix a LOT more however. Therefore likely there was no need of payment. It's simply a mutual buisness deal.

While this wouldn't help Sony at all on PS3.

So I really don't even get what your argueing then.

i'm simply saying that your not an analyst and i can already think of 5 ways this helps 360 more than netflix.

If anything, this is a quick cash in for netflix for the sacrifice of more money over time.

sacrificing first party control for a larger market base... seems like netflix is feeling some pressure from something outside.

 Y wouldnt it help Sony? NextFlix would be for free on PSN.......Hence more buisness for netflix...and better services for Sony.... why would Sony refuse that?

The same reason Sony doesn't have PS2 backwords compatability in it's PS3.

It would cut into sales. Sales of their downloads rental service and cut into sales of Blu-ray and DVD copies of their films.

Hurting their bottom line.

Yeah, Blockbuster for one which is eating away at their main buisness method. 

That and the fact they know their service is on the decline as digital content delivered on demand is the way of the future... and they want that future to be them. 

Apple TV is planning a new, larger realauch, Vhudu is becoming popular.  They know they need to evolve or die.  This insures they won't get beat out in the long term.

http://www.siliconvalley.com/ci_9879195

"Xbox Live users who have a Netflix account will be able to watch streaming movies from the service concurrently with up to 7 other online friends, including those who don't have a Netflix subscription."

"Don Mattrick, Microsoft's senior vice president of interactive entertainment, predicted that, thanks in part to the updates, the Xbox 360 would outsell Sony's rival PlayStation 3 this console cycle."

http://labuzzblog.com/2008/07/14/e3-2008-xbox-360-rocks-new-avatars/

I dunno how credible this "news" is but it states a specific exclusive contract.

So your facts are
360 thinks this is going to help increase sales or close the sales gaps to the tune of (what do we see every week, in comparison to ps3?) 50k consoles per week?
You then see how people with the account can share it with up to seven people, which realistically will cut netflix subscriptions on the 360 to maybe half of what was possible. And they are not allowed to pursue any other vg console venues.
sounds like this is MS' game if you ask me

BTW: i think this pretty much ensures them being beaten out in the long term if they start doing deals like this.

the only thing I see... live streaming on demand is the only way to go in the future, finally someone is actually getting a good idea in the IS/IT industry.... i'm tired of those useless format war of digital support when technically the only thing it does better than the rest is taking space on my shelves and keeping dust....
now lets develope cloud and grid computing.... and we won't need to worry about anything else than having a screen a sound system and a multimedia box receiver, and a very high speed connection
no need of a PC or a player or even a console.....
the future is all about software and services.... but people have problems to get that... they need their piece of crap in their hands to be happy for now, it's changing, and it's changing fast, you better like it because it won't ask you for your opinion

not weird. There were rumors going back to the beggining of the year, and people even voted (even me)