The Little TiVo That Could

Despite the TiVo (NASDAQ:TIVO) controversy Tuesday, which took a hunk out of the stock's price, shareholders can't accuse the company of pausing the action. Given a cloudy and evolving future, TiVo's got some changes up its sleeve. Yesterday, the digital video recording company announced several initiatives, including price cuts, to get subscriber growth rolling.

TiVo dropped the price of the subscription for a second TiVo unit in a home by half, to $6.95, and reduced the price of the box to $129 with a rebate. CNET reported that TiVo's Home Media option, once a $99 add-on, is now part of the standard TiVo subscription.

Most interesting, though, is TiVo's admission that it will leverage its skills into online content through the Home Media option. In essence, TiVo will become the bridge between your computer and your television. (Goodness knows, many of us need that bridge!) It will allow you to download digital content, like movies and music, from your PC to your TiVo (and thus, your TV). In the fall, you will be able to transfer content from TiVo to your PC as well.

It's not the first time there's been reason to muse over whether this Motley Fool Stock Advisorpick could possibly pose a challenge to subscriber growth and retention for companies like Netflix (NASDAQ:NFLX), given TiVo's capacity to keep people up to their ears in programming. However, seeing that Netflix has also been eyeing video on demand as the "next new thing," maybe these two really could become home entertainment archrivals one day.

After all, if TiVo's Home Media option allows consumers to stream their video downloads easily from their computer to their television, it ends one of the biggest barriers to digital video downloading right there -- the idea that most people don't want to sit on their PC and watch an entire film.

How much of a boon the musical side of things would be remains to be seen, though it seems that the move could attract those who have avoided adopting Apple's (NASDAQ:AAPL) iPod and iTunes, and those of other competitors.

Yesterday, Fool contributor Rich Smith gave good reasons to remain calm and resist buying into the panic related to the sale of the DirecTV stake. This gives good indication that TiVo certainly isn't asleep at the wheel when it comes to what kind of things it can do to stay relevant in a quickly changing entertainment universe.

Given the competitive forces at work, I certainly wouldn't be the one to say that TiVo is out of the woods yet. However, I do have faith that the company's got some good ideas of where it can take that TiVo box -- that is, thinking out of the box. That's a good thing, because its survival depends on it.

TiVo is a Motley Fool Stock Advisor pick. At one time, Netflix made the cut, but it's since been demoted from the pick list. What other stocks have the brothers Gardner chosen? Check outMotley Fool Stock Advisorrisk-free for six months. Or talk to other Fools about the entertainment biz on theTiVoorNetflixdiscussion boards.

Alyce Lomax does not own shares of any of the companies mentioned. Having purchased her own TiVo last April, she hardly sees the light of day now.