These days it feels like an arms race in the battle of the movie rental companies, Netflix vs. Blockbuster. In December, Mike Arrington wrote why he was breaking up with Netflix, and I quickly got hip to the what Blockbuster was rolling out. I’m sure you’ve heard Alec Baldwin explaining how in addition to DVD’s through the mail, you can return your DVD’s directly to Blockbuster and get another rental on the spot. Plus you get one free rental coupon a month.

Between Mike and Alec I was convinced, and I signed up with Blockbuster in addition to Netflix. The single remaining factor was the speed of delivery, so my wife and I resolved to put the services to the test by returning two DVD’s from each service on a Monday and seeing what came back first. Needless to say, this didn’t help, because Wednesday four DVD’s showed up. We were in a dead heat and I was leaning towards Blockbuster, while my wife was loathe to break up with Netflix as she loves the interface and doubted we’d ever actually use the Blockbuster in-store service.

After two months we hadn’t used the Blockbuster in-store services, and then a week ago, David Pogue hit me with the holy grail. Netflix is starting to offer streaming movies. Wow, that is a great fit, and especially for us, as I have a Windows Media Center PC hooked to my TV right now and we’ve already been MovieLink early adopters.

So I began my mission to get access to “Watch Now” by Netflix. They are rolling it out 250,000 customers at a time, and it’s not set to be fully deployed until June 2007. I couldn’t wait that long so I gave them a call (1-888-638-3549 is the phone number for Netflix; they make it so hard to find). I told the rep I was a blogger and early adopter who had a perfect setup at home to give the new feature a whirl and blog about it of course. He wasn’t biting, but he did let slip a morsel of info on how I might get access. So here it is, listen carefully, how to get Netflix’s “Watch Now” NOW:

A couple times a week, Netflix is releasing an allotment of “Watch Now” allocations to people who are prepared to go digging for it. They won’t say when, it is in the morning each day they do it, and there are 10,000 slots available each time. When those are used up, it is turned off. (You west coasters might have to wake up early.) You can check each morning if the upgrade is available by clicking on the “Your Account” link and then looking for the link “How can I watch movies on my PC?” which is located on the right of your screen just below the “membership at a glance”. If it takes you to the generic page that says it will be enabled in our account over time, then try again tomorrow. But if it looks like this (like my account did today), then you’ve hit paydirt.

After upgrading my account this morning and watching the first 4 minutes of The Untouchables, the new Watch Now feature is looking great to me. Here are some initial thoughts:

• Time-metered access - you can watch a certain number of hours a month, based on your account level, rather than a number of movies. This means at an average movie length of 90 min, I’ll get 12 extra movies a month. I’ll never watch that many, but it sounds great.
• Bandwidth-based picture quality - there is a little meter that measures your bandwidth and shows you what picture quality you’ll get. Even over a wifi connection at the “basic” bandwidth level, the movie looked fine in full screen mode on my laptop, but I’m sure for the TV we’ll want a wired ethernet connection.
• Decent selection - there are about 1000 titles available, and I thought they’d be the dregs, but there actually are some movies we want to watch. As a comparison, iTunes only has about 250 movies currently.
• Only for IE - this is a pain, but not a deal breaker by any means.

There’s also a great video demo over at Hacking Netflix if you want to see more.

Good luck getting the upgrade. I’d love to hear your thoughts on if this tips the scales for you on the Blockbuster vs. Netflix arms race.