Netflix will add 1080p, 5.1-channel surround sound streaming to its online video service later in 2010

[UPDATE: As one of our readers points out below, Netflix will not be adding 1080p this year. Apparently, the feature was mistakenly placed on the 2010 development road map. That's a fairly big boo-boo. In any event, 5.1 surround sound is still on the list for adoption this year. ]

According to our sister site CNET, Netflix's on-demand video streaming service, a.k.a. Netflix Watch Instantly, is jumping on the 1080p HD bandwagon later this year, with a corresponding bump in audio to 5.1-channel surround sound.

The move comes after the company recently announced buoyant fourth-quarter results and predicted that two thirds of its monthly subscribers will watch videos through its online service by the middle of 2011. In addition to viewing them on PCs and laptops, subscribers can access Netflix Watch Instantly on game consoles, Blu-ray players, and other "connected" home theater devices.

While those watching videos on compatible monitors and HDTVs will be pleased with this development, what remains to be seen is how well Netflix (and your broadband connection) will be able to handle streaming the bandwidth-thirsty 1080p feed to your device. Already throughput speeds of around 5Mbps are required to handle 720p content from Netflix's service—how much of a bump will you need to view 1080p material without a major case of the stutters? Obviously how quickly Netflix's engineers (using Microsoft's Silverlight technology) can solve any technical hurdles surrounding this issue may play a part in when exactly subscribers will get their 1080p.