Will streaming video services such as provided by Netflix emerge as a key driver of end user premium broadband access subscriptions? Netflix executives seem to think so. If so, something of a tipping point for movie content would be the reason.

"For the cable broadband business however, Internet video is not a threat, but instead is the killer app driving adoption of high-end broadband packages," says Netflix CEO Reed Hastings.

"The broadband business for cable has one huge advantage over the video business," says Hastings: "No content costs and therefore huge gross margins." There Hastings is referring to contracts that give cable operators digital distribution rights for content licensed as part of linear video offerings.

"As we see it, the growth of Internet video is like to boost overall cable profit," says Hastings. Cable executives might not entirely agree, but Hastings argues business cooperation with cable could lead to end user buying of pricier broadband access packages.

Netflix also is planning its first international streaming effort in the second half of 2010, a distribution method that will not include mailing of DVDs to subscribers, but will rely entirely on streaming delivery.

"Our basic approach is to start small and then expand into other countries," says Hastings.

On a separate front, Apple's (News - Alert) rumored launch of a tablet device could provide yet other evidence of an accelerated move to digital distribution of movie content.

The "threat" is that Apple's tablet might prove to be such a compelling client for movie viewing and distribution that it does to movie distribution what the iPod did to music sales.

NPD, for example, reports Apple’s ITunes download store made up for 25 percent of all music unit sales in the first half of 2009, and online distribution now accounts for 35 percent of all music sales. But that isn't he worst issue. The bigger problem is piracy, as music sales are dropping overall.

But control of distribution also has shifted to Apple, and away from the traditional distribution channels.

The danger for video content distributors is that the same thing will happen to premium video sales.

The other issue is the gross volume of video sales and profit margins on those sales. So far, no new means of digital distribution of video content has been anywhere nearly as successful as the traditional theatrical release followed by DVD sales model. But that is changing as end user buying of DVDs is falling.

If Apple launches a tablet PC that resembles a very large iPod with a 10 inch screen, it might be the closest thing to an easy-to-use portable TV screen as anything yet seen.

Marry that device to broadband and iTunes and you can see the opportunity or problem, depending on where one sits in the video distribution chain. Apple has a long history of not encouraging piracy, so that would not be the biggest issue video content owners would face. Rather, it is the ceding of a large measure of control to Apple, as has happened with music, that is the likely concern.

But as with the Reed Hastings scenario for Netflix, all of that might provide a boost for Internet service providers able to supply high-quality broadband access services.