Subscribers of both Netflix and TiVo got a little treat this morning when TiVo released a software update for three of its DVR models allowing them to stream Netflix Instant Viewing titles directly to their DVR and thus right to their television.

The models included in this recent update are the TiVo Series3, TiVo HD, and TiVo HD XL. Those who currently subscribe to both Netflix and TiVo will not be charged extra for this service.

Netflix has really been going the extra mile. For me, the exclusive deal with Microsoft to allow for streaming through the XBOX 360 was a great step, and also sealed the deal in my loyalty to the Red Envelope company.

Deals like this make me wonder how much long we'll be dealing with physical movie libraries before we go completely digital. With so much OnDemand video being streamed online and now to televisions, how long can a new format like Blu-Ray last before digital downloads become the media leader. Services like Boxee, Hulu and iTunes (in conunction with the iTV) are really changing the face of media sales, and I for one am really interested to see where this will end up. The only real problem I can forsee is having so many different OnDemand services from various studios and such, that things are going to get sloppy.

For more information about how to set up Netflix Instant Viewing on your TiVo DVR just go to the TiVo site for detailed instructions.