By David B. Wilkerson

CHICAGO (Dow Jones) -- Blockbuster Inc. will bring its movie-download service straight to the television set thanks to a pact it announced Wednesday with digital video recorder pioneer TiVo Inc.

Dallas-based Blockbuster (BBI) currently offers thousands of movie titles for download to the Web due to its 2007 acquisition of Movielink. Beginning in the second half of this year, it will offer downloads to TiVo's Series 2, Series 3, TiVo HD and TiVo HD XL DVRs.

TiVo DVRs will be sold at Blockbuster stores around the U.S. and at Blockbuster.com. The companies said they would both gain new distribution outlets.

DVD-rental pioneer Netflix Inc. (NFLX) has cut severely into Blockbuster's market share over the past several years with its discs-by-mail service, forcing Blockbuster to adapt with an online offering of its own. Now, Blockbuster wants to make sure it can offer an alternative to Netflix's movie-streaming service.

Netflix also offers many films that can be streamed to the set top through partnerships with Microsoft Corp.'s (MSFT) Xbox 360 and LG Electronics Inc. (LGEJY).

With unlimited plans starting at $8.99 a month, Netflix customers can rent at least one DVD at a time and stream as many movies as they like.

"Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our OnDemand service but also from our stores and through our by-mail service as well," said Jim Keyes, Blockbuster's chairman, in a statement.

Tom Rogers, chief executive of TiVo, said it "could not be more natural" than for Blockbuster customers to think of the service TiVo provides.

DVRs allow viewers to pause, rewind, fast-forward or instantly replay any live broadcast by recording it onto a hard drive.

Blockbuster's move comes less than a week after it reiterated its determination to remain a going concern despite credit difficulties.

The company said three of its largest creditors have agreed to extend its revolving-credit facility through Sept. 30, 2010, alleviating concerns about a debt payment that would have been due this August.