Best Buy and TiVo Get Cozier

If you think you saw TiVo (Nasdaq: TIVO  ) and Best Buy (NYSE: BBY  ) together at a trendy sushi hotspot, your eyes didn't deceive you. The two companies are entering a strategic alliance that, if press releases are ever to be believed, will "transform the digital home entertainment experience."

Now, of course you know that press releases are peppered with hyperbole and promises of free ponies. Best Buy has been selling TiVo DVRs for years, so what's the point of some "strategic alliance" when the two are already in commercial cahoots?

Well, let's just say that we could see some interesting developments if things pan out here. The two companies will investigate the creation of a unique platform for TiVo boxes sold through Best Buy. Ideally, a TiVo purchased at Best Buy will allow the consumer-electronics retailer to reach out to the couch potato with store promotions and easy access to digital services.

At its most rudimentary level, this may simply mean that TiVo shoppers through Best Buy will be given occasional in-store savings or have access to Best Buy's Napster through their DVRs. TiVo already dishes out promotional spots and has a music-streaming deal in place with RealNetworks' (Nasdaq: RNWK  ) Rhapsody, so this type of deal is old-hat.

However, let's take this an evolutionary step further. It may creep you out to consider the Big Brother implications, but what if Best Buy hits you up with an offer for the latest season of House on DVD, just because it knows you've been a regular watcher? If you saw Arcade Fire on Jimmy Kimmel last night, how would you like the band's new CD?

This move, too, isn't entirely unprecedented. Last summer, TiVo struck a deal with Amazon.com (Nasdaq: AMZN  ) that allows viewers to pick up items featured on certain shows -- like a book on Oprah or a DVD from a movie star on The Colbert Report -- with just the TiVo remote and a PIN-protected online connection.

And this is what makes the deal a win-win. Best Buy will ramp up its in-store promotion of TiVo boxes, which may finally be the key to breathing new life into TiVo's struggles to grow its organic base of subscribers. Best Buy will also explore the incorporation of TiVo technology -- the way licensed partners including DirecTV (NYSE: DTV  ) , Cox, and Comcast (Nasdaq: CMCSA  ) have -- into Best Buy's Insignia and Dynex house brands of home-theater appliances.

There's more to this deal than just drying ink and a handshake. It may not "transform the digital home entertainment experience," but it will be pretty darn close.

Other "thumbs up" reads on TiVo:

Amazon.com and Best Buy are Motley Fool Stock Advisor selections. Best Buy is also an Inside Value recommendation. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz owns shares in TiVo and a TiVo box. 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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