LG Electronics and Netflix will work to develop a set-top box that can stream movies over the Internet directly onto a television screen, the companies announced Thursday.

Netflix, best known for its mail-order DVD rental service, began offering a video-on-demand service for impatient movie buffs last year. That service, though, only plays movies on a PC, and with 6,000 titles available for download offers a more limited selection than the 90,000 Netflix offers by mail.

The new streaming service will allow customers to watch on a high-definition television, using a networked set-top box that LG plans to ship later this year, the companies said.

While Netflix seems keen to invest more in download services, other players are pulling out. U.S. retail giant Wal-Mart Stores closed down its video download service last month, less than a year after introducing it.

Wal-Mart used Windows Media Player to wrap its video files in a DRM (digital rights management) layer so that they will only play on the PC to which they were downloaded, or on certain portable media players. Now that the service is closed, customers cannot move their videos to a new PC, according to the service's Web site.

Macrovision, a software developer specializing in DRM systems, is also hoping to play a role in the market for downloads direct to the television screen. Movie download service CinemaNow will use Macrovision's DRM to prevent copying of its content downloaded directly to set-top boxes or digital television sets, the companies announced Thursday.

The IDG News Service is a Network World affiliate.