Engadget is reporting that Netflix has decided to postpone the online movie download service that they’ve been planning. The problem at hand? Licensing of course. Movie studios are just too paranoid about content (movies) being made available over the internet. Let’s face it – any attempt at protecting videos or movies have been thwarted time and time again so how do you protect this multi billion dollar business? Well you don’t let upstarts like Netflix get their movies out to the people. DVD rentals are still ok since movie studios get a cut of all the rental fees that Netflix accumulates… but movie downloads? That’s a bit harder to manage.

Unfortunately this leads us to the second part of the story that PVRBlog is reporting – the Netflix/TiVo deal is now very much dead in the water. Without movie downloads, it doesn’t make much sense for TiVo to partner with Netflix at this point. Unfortunate isn’t it?

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