Let's hope Netflix (NFLX) executives weren't counting on its announcement about instant movies on your PC to win the hearts and servers of the blogosphere. Because the vaunted voices of the digital brain trust have seen your little idea, Reed Hastings, and they are not impressed. Our Business 2.0 colleague Owen Thomas, one of the Browser's founders, was blunt in his dismissal , saying: "This offering is so weak that Netflix might as well not have bothered." Similarly, the mighty Om Malik suggests that Netflix's movies-to-PC move will "soon be relegated to the dustbin of failed ideas."

The chief criticisms are: Netflix is offering streaming video, rather than downloads, and thus consumers can't copy movies or use them in more convenient ways; only 1,000 titles will be available when the service launches in June; and, in the age of home-surround-sound and mural-sized flat screen TVs, there is a limited market for watching movies on a computer.

Only a fool would pick a fight with people who know as much about the tech biz as Thomas and Malik. But it seems to me that they are calling the game in the second inning. First of all, the list of movies available for streaming will surely grow, and the limits on that growth are coming almost entirely from Hollywood studios, not Netflix. More importantly, these critics are analyzing Netflix as if it were some fledgling start-up that must get the technology exactly right in order to survive. Quite the contrary: Netflix is a nicely profitable company that continues to grow rapidly. In the third quarter of 2006, it added another half-million subscribers, and is now approaching six million customers who send Netflix an average of $16 a month. With that kind of cash flow, the company can easily afford the $40 million it's reportedly spending on the streaming.

Netflix's strategy should be viewed as a five- to ten-year game plan, in which it continues to sign up people for DVDs by mail, while simultaneously helping its customers make the transition to the inevitable digital download market.

And in that game, don't count Netflix out. Like Amazon (AMZN), they are absolutely brilliant at building and enhancing the customer experience. They have an unparalleled database of what kind of movies their customers like to rent, and that database will be just as useful in the digital download era as it is now.

Of course they don't have the technology worked out yet, because the marketplace hasn't decided what the precise path for digitally downloaded movies will be. Netflix's baby-step announcement is a way of saying that they will be a major player regardless of what the final tech setup is. I, for one, would not bet against that proposition.