Netflix on Xbox 360 has been a great success for both companies, allowing Netflix members to watch streaming rentals on the Microsoft console at no additional charge (except for the Netflix and Xbox Live member accounts).

Brian Crecente at Kotaku recently shot a short video showing off the latest version of Netflix on Xbox 360, and it looks great.  Now you can queue up movies on the fly and even watch them with other people on the network at the same time.  So far, this is a great user experience, and will lead to more subscriptions, right?

Unfortunately, Crecente experienced that jabbing pain whenever a paying customer loads up anything with DRM.  When trying to launch Pineapple Express, he was met with a message that it could not be viewed with a party.

Why is that?   Our hunch is the movie studios, who have been extremely slow to get out of the stone age and into the 21st century, put in additional restrictions for some unknown (re: stupid) reason.

A great service rendered just a little bit useless, at least until the movie studios wake up and allow honest consumers a more seamless experience.  It’ll happen, fellas, you just need to breathe a little bit and let it go.