Blockbuster, TiVo To Deliver Movies Online

The online movie delivery triangle featuring Blockbuster, TiVo, and Netflix has taken a new turn with struggling Blockbuster and its brick-and-mortar stores getting a boost by teaming up with TiVo in a deal that will likely improve sales for the two new partners.

Blockbuster, which just days ago had hired a restructuring firm to advise it, announced the partnership with TiVo, which calls for the latter company to deliver Blockbuster's digital movie library online to TiVo digital video recorders that are attached to TVs.

In a statement, Blockbuster chief executive Jim Keyes said: "Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our On Demand service but also from our stores and through our by-mail service as well."

But what's in it for TiVo?

For one thing, it will be able to sell its DVRs at many of Blockbuster's 4,000 U.S. U.S. retail locations. And because Blockbuster On Demand will be available to TiVo's 800,000-strong owners, TiVo will be able to reach a new movie-watching audience. Compared with Netflix -- the other major movie provider -- Blockbuster has a relatively small selection of fewer than 10,000 titles. Blockbuster typically charges $3.99 for watching a recently released movie, while Netflix, which has a massive film library, has a subscription approach.

For Blockbuster, which has been negatively affected by Netflix's growing popularity with its service, the TiVo deal finally gives it a valuable partner. Blockbuster's previous interest in merging its media strengths with Circuit City's hardware didn't go anywhere, and Circuit City closed its doors earlier this year.

Blockbuster's extension of a revolving credit line that it negotiated last week helped pave the way to the TiVo deal. It had reported a loss of $359.8 million in its fourth quarter of 2008.

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