The ability to watch movies as a group online using Netflix and avatars is not supported by all of the movies on the service, Microsoft confirmed to Kotaku today.
"We are working closely with our partners and studios to deliver Xbox LIVE Parties for as much content as possible," a Microsoft spokesman said. "We offered the Xbox LIVE Party feature to all content owners, and what's up on the service reflects what the rights holders are comfortable with. We're confident that the community will be pleased with the great selection of Party-enabled content."
While the spokesman wouldn't confirm which studios decided not to support the feature, or why they decided not to, he did say that most do support it.
While testing the feature myself I noted that Disney and Starz, which airs some Disney movies on their premium television channel, did not support the feature.
Also worth noting is the fact that you can switch to a mode that doesn't show the avatars or room they are in while viewing a movie as a party.
The upgraded Netflix service hits Xbox Live on Aug. 11.