Netflix, the online DVD rental company, and TiVo yesterday said they will work together to deliver movies digitally down the wires, presumably specifically to the latter's PVR equipment.

The announcement was anticipated - as we reported last month.

It's an interesting partnership. Netflix has built a solid online brand, while TiVo brings its hardware and digital media manipulation expertise to the pairing.

If movies are to be delivered, on demand, via the Internet, copy-protection will be de rigueur, and TiVo's relatively enclosed system is almost certainly more attractive to the movie industry than the more hackable PC.

TiVo faces increasing competition from not only PC-based PVR solutions but a growing number of consumer electronics companies that have followed its lead. Their efforts are only going to increase: Sony's PlayStation 3 will very likely deliver key TiVo-esque features to a much broader audience than TiVo itself has reached - no matter how many guest appearances on the likes of Sex and the City the original PVR gets.

TiVo's strategy appears to centre on playing up the hardware's media acquisition and management facilities, promoting the hardware more as a media centre system than the bionic VCR of yore.

Netflix, meanwhile, gains help in delivering a service appropriate to its name. Renting a whole batch of bytes delivered through a broadband pipe isn't conceptually any different from delivering that same data on a physical disc through the mail.

Neither is delivering it over a cable TV network, and it's won't be long before those companies are offering similar services, slowly but surely diminishing the DVD rental business that's currently Netflix's bread and butter. ®

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