A Blockbuster Deal for TiVo

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TiVo (Nasdaq: TIVO  ) is gradually becoming the Swiss army knife of digital television.

Blockbuster (NYSE: BBI  ) is the latest company to make TiVo digital video recorders indispensable home theater appliances. TiVo owners will now be able to rent or purchase digital movies through Blockbuster OnDemand.

It's a win-win.

Blockbuster will begin selling TiVo boxes through its stores and website when the service becomes available in the second half of the year, broadening the reach of the DVR pioneer. Blockbuster will also be able to reach millions of active TiVo subscribers to sell piecemeal video, eliminating the pressure for the company to sell more of its $99 proprietary Wi-Fi box solutions.

The market's digging the news. Blockbuster's stock opened 21% higher today. TiVo shares began the trading day with a 5% gain.

The news comes at a time when both companies can use a morale boost. Blockbuster had to hose down bankruptcy rumors earlier this month. TiVo is shedding subscribers.

The partnership makes sense, though Blockbuster better not get its hopes up. It will have competition on TiVo boxes that can also stream Netflix (Nasdaq: NFLX  ) digital offers -- at no additional cost for existing Netflix subscribers -- and consume a la carte video through (Nasdaq: AMZN  ) .

True to its original goal of time-shifting programming, TiVo owners also spend plenty of time watching pre-recorded content.

That has certainly never gotten in the way of companies brokering deals to get to TiVo subscribers. Whether we're talking about ordering dinner from Domino's Pizza (NYSE: DPZ  ) or pumping tunes through RealNetworks' (Nasdaq: RNWK  ) Rhapsody, TiVo really does want it all.

Yes, it is the Swiss army knife of digital television. Going by TiVo's ability to broker deals with mortal enemies like Blockbuster, Netflix, and Amazon, it's safe to say that it also has the same neutrality stance as Switzerland.

Other "thumbs up" reads on TiVo: and Netflix are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz owns shares in TiVo and Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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  • Report this Comment On March 26, 2009, at 9:44 AM, MisterMike1 wrote:

    Yawn. Netflix already has a deal with TiVo for the streaming movies and Amazon for the PPV newer titles. Why would anyone signup for BB and get less of everything. Once again, BB is late to the party. Whatever BB is spending to set this up is just another nail in their bankruptcy coffin!

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