Microsoft announced that they have struck a deal with Netflix that will allow Xbox Live Gold subscribers to watch movies online for free. The new service that gives users a movie subscription is expected to be rolled out after a redesign of the Xbox 360’s interface. This new service will allow friends of the Xbox Gold Live subscribers to watch these movies as well.

In addition to the Netflix deal, Microsoft confirmed a deal with NBC-Universal to offer their catalog on the Xbox Video Marketplace for download. TV shows will be available as well, such as The Office and Heros. These new deals gives Microsoft an edge over iTunes by offering a subscription service that Apple doesn’t currently offer.

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[Sources: electronista ]