1080p streaming video coming to Netflix [update: maybe not], but will it matter?

Netflix fans, your streaming video service is just about to accommodate higher HDTV resolution in glorious 1080p. It's unclear exactly when this 1080p streaming with 5.1 surround sound will be rolled out — Netflix says it will be sometime "later this year."

You'll need more bandwidth to handle the higher resolution, probably exceeding the 7 to 10 Mbps required to stream the company's 720p HD content on the Roku box, TiVo, the Xbox 360, and PlayStation 3. Let's hope Netflix has a better compression scheme up its sleeve for this 1080p trick, supported by Microsoft Silverlight 1080p streaming introduced last March.

All that additional resolution won't mean much unless Netflix can stream more than just a measly 6% of its movies in HD, as it does now. That's lame — even Netflix's own PR flack calls it "underwhelming." Beyond that, there's the problem of bandwidth-stingy Internet service providers, many of whom also sell pay-per-view movies on cable, balking at opening up their pipes for a competitor's 1080p content.

UPDATE: Now Netflix tells CNET the reference to 1080p streaming was a mistake. According to CNET:

"Netflix now claims that it incorrectly acknowledged 1080p streaming in the company's 2010 development road map. A Netflix representative has clarified that the company plans to bring 5.1 surround and closed captioning to its streaming HD videos later this year, though 1080p Watch Instantly is not on the books for this year."

Oh well. Netflix must think bandwidth won't be wide enough for that kind of rez, at least not this year. Or maybe it's just being coy, still planning a big 1080p splash!