Netflix is firing back at Blockbuster.com with their new internet streaming movies and shows. Their offering will now put them in competition with heavyweights YouTube, Joost, iTunes and others.

As of this morning, a select number of Netflix customers will be able to watch their and tune into their 1000+ movie/ show database. The rest of their customers will receive it in phases over the next 6 months. It has reported that NBC, Sony Pictures, MGM, 20th Century Fox, Paramount Pictures, Warner Borthers, Lionsgate and New Line Cinema will be contributing to the service.

Netflix will offer it for free and will be budgeting of $40 million for the overhead and licensing.

Movies and shows will be streamed with a downloadable software application and the amount of viewing time allowed will depend on the type of subscription you have.

Here is a demo of the new Netflix feature by HackingNetflix.com.

Press Release [Netflix]
Site [Netflix]