Netflix finally added full AirPlay support to their app in the latest iOS 7 update but in the process of doing so the company broke the feature which allowed an iOS device to be connected to the TV with the HDMI AV adapter.
Interestingly, it seems the addition of AirPlay has directly caused the problems, with some users speculating that the update was part of some negotiation with Apple and Netflix to encourage users to purchase Apple TVs for the AirPlay feature.
Netflix have commented on the issue stating that they are aware of the problem and it is only affecting a very small amount of users. They are working on a fix to the bug which they will publish “as soon as they can”.
If you’re experiencing this bug, an Apple support thread suggests turning off AirPlay will force video to output via the HDMI adapter.