Internet DVD renter Netflix has put its plans for a movie download service on hold after failing to agree terms with Hollywood.

In a conference discussing its third quarter numbers Netflix CEO Reed Hastings said the company would continue working on the infrastructure for the planned service, Reuters reports.

However, due to problems obtaining license agreements with Hollywood studios, the test phase of the service has not been postponed. Hastings said the company would hit the play button on its plans “when the content climate beings to thaw.”

The studios' reluctance to let Netflix squirt their movies down the wire is no great surprise. Because of its paranoia about unregulated distribution of its content Hollywood is currently about as keen on the internet as it is on thoughtful, foreign language dramas featuring real, unaugmented people. Perhaps Netflix would have more success if it courted Bollywood instead of Hollywood.

For the third quarter, Netflix reported revenues of $174.3m, 23 per cent up on the previous year. Net income was $6.9m, well down on the previous year's $18.9m.®

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